Bank Of England

The Bank of England is reported to be reconsidering a proposed cap on institutional stablecoin holdings after heavy criticism from industry groups, a development that could ease regulatory pressure on crypto firms in the UK.

Bank of England Deputy Governor Sarah Breeden said the BoE is “genuinely open to other approaches” for regulating systemic stablecoins but expressed disappointment at a lack of constructive industry engagement. Her remarks signal potential flexibility in upcoming rules if firms engage more productively.

A House of Lords inquiry has opened into stablecoins amid regulator warnings they could drain bank deposits and reshape payments. The Bank of England is simultaneously finalizing rules to treat large stablecoin issuers as systemically important.

Cross-party MPs and peers have urged Chancellor Rachel Reeves to rein in the Bank of England’s proposed regime for systemic stablecoins, warning the plans risk pushing crypto innovation and investment out of the UK. They argue the measures could be disproportionate and harm the domestic fintech ecosystem.