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The Bank of England is "looking very hard" at re-examining its proposed restrictions on sterling stablecoins, Deputy Governor Sarah Breeden told the Financial Times, in a signal that the UK regulator is preparing to ease a framework the industry has argued would push activity offshore.
Why it matters
The BoE's original proposals would have required systemic sterling stablecoins to hold reserves in short-term gilts and ringfence them from issuer balance sheets — rules industry participants warned were tighter than the U.S. GENIUS Act regime and would effectively block sterling-denominated stablecoin issuance in the UK. Breeden's comments suggest the central bank is now responsive to those concerns.
Market impact
The shift arrives as Governor Andrew Bailey warned last Friday that international regulators face a "coming wrestle" with the U.S. government over competing stablecoin standards. With the U.S. moving toward a lighter-touch federal framework and Europe preparing MiCA implementation, the UK's willingness to soften its rules would be a competitive concession to keep sterling stablecoin activity onshore.
Frequently asked questions
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Why is the Bank of England reconsidering its sterling stablecoin rules?
Deputy Governor Sarah Breeden said the BoE is "looking very hard" at re-examining the restrictions, signaling responsiveness to industry concerns that the original framework was tighter than the U.S. GENIUS Act and would push activity offshore.
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What did the BoE's original stablecoin proposal require?
The proposed rules would have forced systemic sterling stablecoins to hold reserves in short-term gilts and ringfence those reserves from issuer balance sheets.
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What did Governor Andrew Bailey say about U.S. stablecoin standards?
Bailey warned last Friday that international regulators could face a "coming wrestle" with the U.S. government over competing stablecoin standards.
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How does the UK approach compare to the U.S. and EU?
Industry voices argued the UK's framework was stricter than the lighter-touch U.S. GENIUS Act, while Europe is moving ahead with MiCA implementation — leaving the UK potentially out of step with both.
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What would a softer UK regime mean for sterling stablecoin activity?
Easing the rules would be a competitive concession aimed at keeping sterling stablecoin issuance onshore rather than ceding the market to dollar- or euro-denominated alternatives.
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