Bank of England Plans Stablecoin Exemptions to Boost UK Crypto Competitiveness

The Bank of England is preparing to introduce exemptions to its proposed limits on corporate stablecoin holdings, marking a notable softening of its earlier regulatory stance. This shift comes as the UK faces growing pressure to stay competitive with U.S. crypto policy developments.

Sources indicate the BoE will issue waivers for specific businesses, including crypto exchanges requiring substantial stablecoin reserves for operational liquidity. The exemptions WOULD also enable stablecoins as settlement assets within the central bank’s Digital Securities Sandbox, a framework designed to test blockchain-based financial infrastructure.

The MOVE reflects a broader effort by UK regulators to balance innovation and oversight. Earlier BoE proposals had imposed caps of £20,000 for individuals and £10 million for businesses—limits criticized by industry participants as potentially undermining liquidity and institutional participation.

A public consultation outlining the new exemption framework is expected later this year, signaling a potential turning point in the UK’s digital asset policy.