The Bank of England (BoE) has called for stronger regulatory measures for stablecoins as their use expands, particularly for those serving everyday payments in the UK. Governor Andrew Bailey and senior BoE officials say stablecoins that become widely used should be treated similarly to banks — with access to central bank facilities and robust protections for users.
Key Points
- •Widely used stablecoins should have regulatory obligations like deposit protection, and they should have access to Bank of England reserve accounts to reinforce their status as credible payment instruments.
- •The BoE plans to issue a consultation paper in the near future outlining a “systemic stablecoin regime” — rules to distinguish between stablecoins that use case‑scale in payments or finance and those that are smaller or less critical.
- •Proposed ownership caps on stablecoins are under review. Initially, the BoE had floated limits for individuals (around £10,000‑£20,000) and businesses (≈£10 million) holding stablecoins that are systemic in nature. After backlash from industry players, the BoE might soften or adjust those limits.
- •Stablecoins are increasingly seen as a possible alternative to some forms of bank money, especially for payments and tokenized financial assets, but BoE emphasizes these assets must be fully backed, backed by high‑quality liquid assets, and subject to oversight to ensure redeemability in all conditions.