The Bank of England has launched a consultation on stablecoins

The Bank of England has unveiled a draft regulation for stablecoins, setting the course for creating a legal framework for digital coins. The new document defines requirements for issuers and payment systems whose activities could impact UK financial stability. The primary goal of this initiative is to strengthen trust in blockchain technologies and minimize systemic risks.

Requirements for Stablecoin Issuers

According to the plans, stablecoin issuers will be required to hold at least 40% of their liabilities in interest-free deposits with the Bank of England. This measure, according to officials, will enhance reliability and help avoid liquidity shortages in crisis situations.

Consultation Phase and Flexible Approach

The central bank intends to complete the consultation phase with market participants by February 10, 2026, and approve the final version of the bill by the middle of next year. It is important to note that the emphasis will be on a flexible approach, allowing for the adaptation of legal regulations as the market situation evolves.

Limits on Stablecoin Ownership

The project also includes limits on stablecoin ownership. For individuals, the limit will be up to £20,000, and for legal entities, up to £10 million. For retail companies, the limit is set at £10,000. Companies requiring larger holdings will be able to request higher limits.

Special Conditions for Systemically Important Issuers

Systemically important issuers will benefit from special conditions. Initially, they will be allowed to hold up to 95% of their assets in government securities. However, as their market share grows, this figure will decrease to 60%. In this way, the regulator plans to mitigate risks while maintaining the stability of the financial system.

Transparent Regulatory Framework

The decision to designate companies as systemically important will be made directly by the UK Treasury. The regulator emphasizes that a transparent regulatory framework is necessary to protect consumers and prevent financial abuse.

In Conclusion

Thus, the Bank of England is taking an important step toward creating a secure and resilient ecosystem for stablecoins, which could have a significant impact on the country's financial market.