The United Kingdom is preparing to implement a new regulatory framework for stablecoins, which includes temporary limits on the storage of such digital assets for users and companies.
This is reported by Finway
Temporary Restrictions and Features of the New Regulation
The Bank of England is developing a legislative framework for regulating stablecoins. According to preliminary information, the limit for individuals on the storage of stablecoins may be set at £20,000, while for businesses it could be up to £10 million. Certain exceptions are also anticipated, which will be detailed in a future document.
“Britain is moving at the same pace as the USA, and the country is not lagging behind in establishing a regime for stablecoins. The limits are temporary.”
Deputy Governor of the Bank of England Sarah Breeden emphasized that the UK aims to keep pace in developing its own regulatory framework for stablecoins. She also highlighted the temporary nature of the established limits.
Reasons for Caution and Further Steps by the Regulator
Breeden pointed out the differences between the credit systems of the USA and the UK. In particular, in the USA, the mortgage market is primarily funded through the securities market, while in the UK it is through commercial banks. This, she stated, necessitates a more cautious approach from British regulators, as stablecoins can impact the mortgage lending market.
The Bank of England plans to complete the development of the regulatory framework by the end of 2025. The new rules will include requirements for asset backing and transparency from stablecoin issuers.
It is worth noting that previously, the Governor of the Bank of England and Chair of the Financial Stability Board Andrew Bailey called on G20 countries to enhance oversight of the stablecoin market.