Overview
- Sarah Breeden, who told the Financial Times on Thursday the plans were “overly conservative,” said the Bank is reconsidering a £20,000 retail holding cap and a requirement that issuers keep 40% of reserves at the BoE with no interest.
- The original limits were designed to slow rapid shifts of deposits into tokenized money and to ensure redemptions under stress, with officials citing lessons from fast withdrawals during the Silicon Valley Bank episode.
- Sasha Mills said this week the Bank views stablecoins as a new form of money and expects to accept applications for systemic payment-coin issuers by year-end, with the BoE supervising systemic issuers and the FCA overseeing non-systemic ones.
- FCA payments lead Matthew Long said the U.K. can support a trusted, redeemable pound stablecoin, noting four firms have FCA sandbox approval to build under supervision.
- With 99% of stablecoins denominated in U.S. dollars, officials are recalibrating rules to keep U.K. issuers competitive and to reduce the risk that the most-used GBP token is launched from offshore.