Bank of England softens stablecoin rules in final framework
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
LONDON, June 22 : The Bank of England relaxed some of its proposed rules on stablecoins in its final policy and draft rules on Monday, responding to widespread concern they could hinder the development of the nascent sterling-backed market.
The BoE scrapped plans to cap individual holdings, opting instead to limit total issuance per stablecoin, initially set at £40 billion ($52.8 billion).
The central bank also slightly relaxed its proposals on backing assets, increasing to 70 per cent from 60 per cent the share of backing assets that can be held in short-term government debt. The remainder must be held in non-interest-bearing central bank deposits.
"This is a major milestone in delivering greater choice and innovation in UK payments," Deputy Governor for Financial Stability Sarah Breeden said.
CNA Games
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Show More
Show Less
"Innovation thrives on trust. And today we’ve set out the foundations of that trust for a new form of money - with prompt redemption, strong protections and central bank support."
Stablecoins, a type of cryptoasset designed to hold steady value usually pegged to a fiat currency, have grown rapidly in recent years, with proponents saying they can enable faster and cheaper payments, particularly across borders.
However, the BoE has warned they could draw deposits away from the banking system, with potential implications for lending and the cost of credit.
($1 = 0.7569 pounds)
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app