Bank of England Maintains Stablecoin Caps Amid Financial Stability Concerns
The Bank of England will retain its proposed limits on stablecoin holdings until systemic risks to the financial system are mitigated. Deputy Governor Sarah Breeden warned that unchecked adoption could drain commercial bank liquidity, potentially destabilizing credit markets.
Proposed thresholds range from £10,000-20,000 for individuals to £10 million for corporations, with possible exemptions for large firms. The central bank is concurrently developing a resolution framework to address potential stablecoin failures.
This cautious approach reflects regulatory concerns about deposit migration from traditional banks to digital assets. The measures aim to prevent disruptions to household and business lending while allowing the nascent market to develop under supervision.
