Bank of England is softening its stance on stablecoin regulation
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The Bank of England has signaled a more pragmatic approach to stablecoin regulation as Deputy Governor Sarah Breeden outlined a vision for a “multi-money” payments system where digital tokens, commercial bank deposits and central bank money coexist, provided they remain interoperable and underpinned by trust.
The Deputy Governor said, “Stablecoins, for a long time the preserve of crypto markets, are beginning to go mainstream… Their safe adoption could unlock faster, cheaper settlement for cross-border transactions as well as supporting trading of tokenized securities.”
Bank of England open to regulatory recalibration
Breeden confirmed that the Bank, along with the Financial Conduct Authority (FCA), is revisiting its 2023 proposals for a regulatory regime on systemic stablecoins. Under revised plans, issuers will be allowed to hold a portion of their backing assets in short-dated UK government bonds and other high-quality liquid assets.
The change in stance by the BoE could be attributed to the increasing success and adoption of stablecoins by institutional players, as well as the favorable regulatory landscape around stablecoins and crypto in general by the Trump-led US government and other jurisdictions.
Paul Grewal, chief legal officer of Coinbase, noted on X that Breeden’s remarks show that global competition spurs creative thinking.
The recalibration reflects the British central bank’s effort to balance innovation with financial stability.
BoE to experiment with digital money
Alongside reg