Bank of England сonsiders exemptions to proposed stablecoin rules
The Bank of England (BoE) is preparing to grant exemptions to its proposed limits on stablecoin holdings for certain businesses, including crypto exchanges.
The move marks a notable policy shift as the UK seeks to remain competitive with the United States, where the Trump administration’s GENIUS Act recently set federal standards for dollar-backed stablecoins, Bloomberg reported.
Key takeaways
- BoE to allow exemptions from proposed stablecoin caps for exchanges and key firms.
- Limits initially set at £20,000 for individuals and £10 million for businesses.
- Consultation on final rules expected by end of 2025.
Governor Bailey softens rhetoric, recognizing stablecoins’ role in payments innovation.
Exemptions reflect flexibility amid competitiveness concerns
The BoE’s earlier proposals introduced strict limits—£20,000 ($26,832) for individuals and £10 million ($13.4 million) for corporate entities.
However, under the new approach, the central bank plans to issue waivers for companies that require large stablecoin reserves for liquidity and settlement.
These exemptions would also enable the use of stablecoins as settlement assets within the Digital Securities Sandbox, an experimental framework aimed at integrating blockchain infrastructure into financial markets. A formal consultation paper outlining the rules is expected by year-end.
Bailey signals softer stance as UK aligns with global peers
Governor Andrew Bailey, once a vocal skeptic of digital assets, has recently adopted a more conciliatory tone toward stablecoins.
He argued: "Indeed, I do not hold that view, recognising their potential in driving innovation in payments systems both at home and across borders. Practice matters, however, and it is critical that these stablecoins satisfy the conditions that enable public trust."
Analysts view the shift as a response to growing industry pressure and criticism from figures like George Osborne, who warned that the UK risks being “left behind” in the second wave of digital finance if it does not accelerate regulation. The BoE maintains that the proposed caps remain “transitional”, intended to balance innovation with public trust in money.
We have previously highlighted that Visa tests stablecoins to speed up cross-border payments.
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