LONDON, May 19 (Reuters) – The Bank of England said on Tuesday it is weighing alternatives to holding limits on stablecoins and will publish draft rules next month.
• “Temporary guardrails” on total stablecoins issued could address concerns about impact on credit provision at lower cost to the sector than holding limits, Deputy Governor Sarah Breeden said at CityWeek 2026.
• The BoE had previously said it would cap holding limits at 20,000 pounds ($26,786) per individual and 10 million pounds per business for sterling stablecoins that are widely used for everyday payments, prompting a backlash from industry.
• Stablecoins are typically pegged at a fixed rate to the U.S. dollar or another major currency, and aim to be an alternative to the existing banking system for making domestic or international payments.
• The BoE has voiced concern that a rapid outflow of bank deposits into stablecoins risked endangering financial stability and could cause a credit crunch.
• The cryptoasset industry has said the BoE’s proposals are among the strictest in the world.
• The BoE will publish draft rules next month and finalise them by year-end “in line with the U.S. timeline,” Breeden said.
• Banks can issue stablecoins so long as they are issued from a non-deposit-taking entity using distinct branding that can “reference” the parent brand, she said.
($1 = 0.7467 pounds)
(Reporting by Phoebe Seers. Editing by Mark Potter)
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