Bank of England eases stablecoin rules, introduces 40B pound issuance cap

The Bank of England published draft regulations for systemic stablecoins on March 18, 2024, introducing a temporary issuance cap of 40 billion pounds. This cap replaces previous holding limits for these digital currencies. The new rules also ease reserve requirements for stablecoin issuers, aiming to foster innovation while maintaining financial stability. The proposed framework distinguishes between systemic and non-systemic stablecoins, with stricter requirements for those deemed critical to the financial system. The central bank stated that the 40 billion pound cap is intended to manage potential risks associated with rapid growth in the stablecoin market. These draft rules are open for public consultation until May 10, 2024, with the Bank of England seeking feedback from industry participants and stakeholders before finalizing the regulations. The move signals a proactive approach by the Bank of England to integrate digital assets into the financial landscape under a regulated structure.