Bank of England's Stablecoin Cap Threatens UK Innovation

The Bank of England is easing stablecoin limits! 💷💸 Systemic tokens could hold reserves in government bonds and enter the Digital Sandbox for testing, as regulators balance innovation with financial stability. UK aims to stay competitive in the global crypto space. #CryptoUK #Stablecoins #DigitalFinance Read more: https://zurl.co/hJJoM

📢📢JUST IN: Bank of England To Grant Exemptions For Some Firms Under Proposed Stablecoin Holding Limits 🔹 The BOE plans exemptions for businesses such as crypto exchanges and will permit stablecoins to be used as settlement. 🔹 Governor Bailey signaled openness to stablecoins but stressed they must meet trust and safety standards. https://lnkd.in/dTAZ-WSZ

Bank of England to Remove Limits on Stablecoin Holdings The Bank of England is preparing to lift restrictions on stablecoin holdings, a move that could reshape how crypto firms operate in the UK. Under current rules, firms are limited to holding £10 million in stablecoins, but the new proposal would remove that cap entirely, allowing greater flexibility for liquidity and payments. This policy shift reflects the UK’s growing commitment to developing a regulated digital asset economy, while maintaining oversight on financial stability and consumer protection. If implemented, the decision could attract more global crypto firms to the UK, positioning London as a key hub for digital finance innovation.

Bank of England Urges Stablecoin Regulation to Match Traditional Money Standards Bank of England Governor Andrew Bailey is calling for stablecoins to be held to the same regulatory standards as traditional forms of money, a signal that oversight in digital finance is entering a more mature phase. As stablecoins become more widely used in payments and settlements, concerns are growing around their reliability, backing mechanisms, and role in the broader financial system. Bailey’s message is clear: if a digital asset is going to function like money, it should be regulated like money. This push reflects a broader global trend, central banks and financial regulators are moving from observation to enforcement. They’re no longer watching the crypto sector from the sidelines; they’re preparing to shape its long-term structure. For stablecoin issuers, institutional investors, and fintech innovators, this moment presents both a challenge and an opportunity. The next phase of adoption will depend on trust, clarity, and a framework that balances innovation with accountability. #Stablecoins #DigitalAssets #CryptoRegulation #BankOfEngland #Fintech #PaymentsInnovation #FinancialStability #StablecoinPolicy #DigitalFinance #MonetaryPolicy #CryptoCompliance #FutureOfMoney #ReutersInsights #LinkedInFinance

The Bank of England is reportedly preparing to introduce exemptions to proposed caps on corporate stablecoin holdings, following industry pushback and growing pressure to keep pace with U.S. developments. The central bank is expected to grant waivers for certain businesses — including crypto exchanges that require large stablecoin reserves — and allow stablecoins to be used as settlement assets within its upcoming Digital Securities Sandbox. Initial proposals suggested caps of up to £20,000 for individuals and £10 million for businesses, but these could now be relaxed when full consultation details are released later this year. Governor Andrew Bailey has also struck a more conciliatory tone, writing in the Financial Times that it would be “wrong” to oppose stablecoins on principle, and acknowledging their potential to drive innovation in payment systems both domestically and globally.

If businesses are subject to stablecoin holding limits, then stablecoins can't be used for corporate cash management. There are more use-cases in the world than 'retail' and 'wholesale'.

To Westminster for Digital Asset Week, where the Bank of England's response to industry backlash on its plans for stablecoins is getting a lot of airtime. Clear take from Anna Irrera at Bloomberg here:

We’re honoured to be featured in Bloomberg News on the recent Bank of England proposal to carve out exceptions in its stablecoin cap policy following industry feedback. As regulation evolves, it’s critical that fintechs and financial institutions build systems that support smaller businesses rather than exclude them. For SMEs navigating access to accounts and finance, we believe the future lies in balanced, progressive regulation, not blanket limits. Check out the full coverage: https://lnkd.in/eiR73fFR #Fintech #Stablecoins #Regulation #DigitalFinance #SMEs #Innovation Anna Irrera, Jannah Patchay, Tony McLaughlin

Are we approaching widespread stablecoin acceptance in the UK? The Bank of England and FCA appear to be relaxing their previously cautious stance on stablecoin regulation to embrace innovation. Deputy Governor Sarah Breeden proposes a "multi-money" payments system to help the UK catch up with global competitors while enabling faster cross-border payments and tokenisation. If new plans are approved, stablecoin issuers will have greater flexibility of choice regarding what assets they may use as backing, including UK government bonds. Alongside these discussions, the Bank of England and FCA are testing digital money infrastructure through initiatives like the Digital Securities Sandbox and Digital Pound Lab, with a "digital pound" blueprint expected by 2026. Read more on the shift here: https://lnkd.in/gVMM62CH #Stablecoin #DigitalPayments

The Bank of England is reportedly set to grant exemptions to its planned stablecoin holding limits, allowing crypto exchanges and select businesses to hold larger token reserves. The move part of its upcoming Digital Securities Sandbox, will let firms use stablecoins for settlement, giving the BoE real-world insight into their use. The decision follows industry pushback against proposed caps of £10k–£20k for individuals and £10m for businesses, amid concerns the UK could fall behind the US and EU in fintech innovation. https://lnkd.in/eZwhzpQQ Meanwhile JP Morgan claim US stablecoins set to increase demand for US $ by $1.4 trillion...