Bank of England set to scrap 'overly conservative' stablecoin caps after industry pushback!

The Bank of England is preparing to water down its proposed stablecoin restrictions following sustained pressure from the digital asset industry, the Financial Times reported Thursday. Deputy Governor Sarah Breeden acknowledged the initial plan to cap individual holdings at £20,000 ($27,000) per coin may have been "overly conservative," and said the BOE is "looking very hard" at alternative ways to manage systemic risk as stablecoins enter mainstream use.

The central bank is also ready to revisit its requirement that at least 40% of stablecoin-backing assets be deposited with the BOE earning zero interest, with the remaining 60% in short-term UK gilts — a reserve structure the industry argued was more restrictive than comparable frameworks in the US and EU. Coinbase's head of policy for Europe, Katie Haries, called the signals "important," adding that a cap on stablecoin holdings is…