The UK’s central bank may ease restrictions on corporate stablecoin reserves following industry pushback.
According to Bloomberg, the Bank of England (BoE) is reconsidering its stance on the proposed limits for corporate stablecoin reserves and is exploring possible exemptions for companies that need to hold larger amounts of fiat-backed digital assets.
Reversal after industry pressure
The BoE’s change of heart comes after strong criticism from the crypto industry and growing international competition. The United States Congress in particular has moved forward with clearer regulation through the GENIUS Act, which became law last July.
Initially, the Bank of England had proposed caps of £20,000 (about $27,000) for individuals and £10 million for companies.
The stated goals were threefold: maintaining control over the money supply, protecting consumers, and preventing excessive reliance on privately issued digital currencies. While these limits might work for traditional businesses, crypto-native companies argue that such restrictions would severely constrain their operations.
These firms need to hold substantial stablecoin reserves to manage trading and liquidity. For this reason, the BoE is considering granting specific exemptions for such entities.
Governor Bailey’s change in tone
BoE Governor Andrew Bailey had previously warned about the risks privately issued stablecoins could pose to financial stability and governments’ ability to conduct effective monetary policy.
However, in statements made last week, Bailey struck a more conciliatory tone, acknowledging that stablecoins could represent a useful innovation capable of coexisting within the broader financial system.
