The Bank of England (BoE) has decided to reconsider proposed regulatory rules for stablecoins pegged to the British pound. Concerns raised by digital asset companies suggest that restrictions on asset custody and reserve requirements could reduce the economic viability of tokens issued in the UK, hindering their adoption. This is reported by Cointelegraph.com reports .
In an interview with the Financial Times, Deputy Governor Sarah Breeden stated that the central bank is looking to abolish or find alternatives to temporary limits on stablecoin holdings for individuals and legal entities. The requirement to hold at least 40% of reserve assets as interest-free deposits at the Bank of England is also being reviewed.
These changes are part of the UK government's efforts to make the country a competitive hub for digital assets while ensuring the stability of the banking system. Currently, pound-pegged tokens account for a very small fraction of the global stablecoin market, which is dominated by dollar-based issuers.
Industry representatives and potential issuers have previously noted that the proposed restrictions are operationally complex and could deter institutional investors. While Sarah Breeden emphasized the importance of maintaining financial stability, she acknowledged that overly strict rules could reduce the attractiveness of the UK jurisdiction compared to the US or the European Union.
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