Bank of England to ease stablecoin rules

The Bank of England is preparing to relax its proposed regulations for stablecoins following industry feedback. Initially, the BOE considered strict limits on holdings and required a significant portion of backing assets to be held interest-free. However, industry participants argued these measures could hinder the UK's competitiveness in the digital economy. Deputy Governor Sarah Breeden acknowledged the proposals might have been "overly conservative" and expressed openness to alternative approaches that still manage associated risks. The central bank is also reconsidering the requirement for 40% of stablecoin reserves to be held interest-free, acknowledging industry preference for earning returns on assets.