Bank of England Proposes 40% Central Bank Reserve Rule for Systemic Stablecoins
In parliamentary testimony, a senior Bank of England official outlined a framework that would force stablecoins deemed “systemic” to keep a minimum of 40% of their reserves on deposit at central banks. The proposal arrives amid a wave of distributed ledger technology projects seeking to use stablecoins for payments and settlement, and signals tighter oversight as authorities weigh financial stability risks.
Regulators say the central bank reserve requirement is intended to reduce run risk and improve transparency, which could increase institutional trust and adoption. Issuers and ecosystem participants may need to adjust reserve structures and liquidity plans, while proponents argue the step will help stablecoins plug into regulated money markets. The proposal is being watched closely by the industry as a potential template for other jurisdictions.