Bank of England Softens ‘Overly Conservative’ Stablecoin Plans Amid Industry Pressure
The Bank of England is reportedly reconsidering parts of its stablecoin plan.A 40% reserve floor could cost issuers £11.2 million per £1 billion in circulation.Observers say the banks shift could point to a move toward a more workable regime. The Bank of England is reconsidering key parts of its proposed rules, softening its push after industry pushback over planned limits on holdings and reserve requirements. Sarah Breeden, the Bank of Englands deputy governor for financial stability, told the Financial Times on Thursday that officials were weighing other approaches to containing stablecoin-related risks as the sector grows. “It was based on experience of potential liquidity stress,” Breeden said. “But we will look hard to see if we have been overly conservative in our thinking there.” Breeden noted the reserve proposal was based on liquidity stress seen during bank runs of late, including the deposit withdrawals from Silicon Valley Bank in 2023. She also acknowledged that the industry would prefer to hold more interest-earning assets. The central bank is “looking very hard at whether there are different ways we can manage what we think is an important risk as stablecoins come into play,” Breeden said. The remarks came a day after Sasha Mills, the Banks executive director for