The UK softened stablecoin rules, but may still be capping its own market
The Bank of England has dropped the piece of its stablecoin plan that the industry hated most, the proposed £20,000 limit on how much sterling stablecoin any one person could hold, along with the £10 million ceiling for businesses. In their place, the central banks June 22 policy statement set a single £40 billion cap on how much of each systemic sterling stablecoin can exist in the UK, and loosened the reserve rules so issuers can finally earn a decent yield on the money backing their coins. Households and companies can now hold as much of a regulated pound stablecoin as they like, and any one of those coins can grow to £40 billion before it has to stop. This puts the UK in a rather unusual spot among large economies. The US and the EU both regulate stablecoins heavily, yet neither puts a hard ceiling on how large a token denominated in its own currency may become. The UK was the first to do that, while calling the limit “temporary” and promising to review it. Sterling tokens account for roughly 0.5% of a global stablecoin market worth around $315 billion, which puts the real test of the new regime well past legality