UK central bank relaxes stablecoin regulations, removes individual holding caps and sets £40 billion issuance limit

Odaily Planet Daily News: The Bank of England released the final policy statement and draft rules for systemic stablecoins on Monday, relaxing several previously proposed regulations. The bank has abandoned the original plan to set limits on individual holdings, instead establishing a temporary issuance cap for each stablecoin, with an initial limit set at £40 billion (approximately $52.8 million).

Additionally, the Bank of England will allow issuers to hold up to 70% of reserve assets in short-term UK government bonds, up from the previously proposed 60%, with the remainder required to be deposited in non-interest-bearing accounts at the central bank. The public consultation period will run until September 22, with the rules expected to be finalized by the end of 2026. Regulated stablecoins are planned to begin operations in the UK in 2027. (decrypt)