The Bank of England on Monday published final rules for systemic stablecoins that would replace previously proposed individual holding limits with a temporary issuance cap for each systemic stablecoin as it seeks to balance innovation in digital payments with financial stability safeguards.
Under the revised regime, the BoE abandoned plans to limit individual holdings to £20,000 and business holdings to £10 million, opting instead for a simpler guardrail that caps the total issuance of any systemic stablecoin at £40 billion.
The bank said the measure is designed to mitigate risks of large-scale shifts from bank deposits into stablecoins while allowing unrestricted use of stablecoins for payments by consumers and businesses. The cap will be reviewed regularly and removed once concerns over impacts on bank credit provision have been addressed.
The framework establishes the prudential standards that systemic stablecoin issuers will face once recognized by HM Treasury.
Bank of England eases stablecoin reserve requirements
