BoE’s New Stablecoin Rule: Concession or Cash Cow? The Shocking Truth Inside.

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Britain’s Stablecoin Pivot Looks Like Concession, but It’s Really About Financial <a href="https://thexder.ru/posi">Positioning</a>

The Bank of England has eased some of its rules for stablecoins, and many in the cryptocurrency industry are seeing this as a positive development. After facing months of lobbying from stablecoin companies and fintech firms, the Bank of England has stepped back from its original plan to require all stablecoin reserves to be held in non-interest-bearing accounts at the central bank.

Regulation eases under pressure

The revised plan now lets companies invest up to 60% of their reserves in short-term UK government bonds, with the remaining 40% held as cash at the central bank. This, alongside existing temporary support and a financial safety net, suggests regulators have given in to pressure.

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This shift highlights Britain’s broader financial plans more than the impact of crypto advocates. The original plan presented a fundamental problem for any UK company wanting to issue stablecoins in pounds.

As my research has shown, while competitors in the US and EU were moving towards business models that could actually make money, the UK’s requirement for 100% reserves held in non-earning deposits basically made it impossible for stablecoin issuers to be profitable. Several people working within the industry warned me that Britain was on track to build the most secure stablecoin system in the world, but one that no major company would want to be a part of.

Risks of stablecoin outflows

The Bank of England received 46 responses criticizing the framework as impractical for businesses and unable to compete internationally. Regulators now appear to believe that overly strict rules would simply move stablecoin business to other countries instead of controlling it.

Here’s the background to this policy change: Britain wants to stay competitive in the evolving world of digital finance without damaging its reputation for financial soundness. Allowing some investment in short-term government bonds (gilts) lets companies earn a small return while still keeping most of their assets safe and easily accessible.

The Bank of England has been careful not to present its actions as a loosening of regulations. Rather than responding to requests from the cryptocurrency industry, regulators are still focused on protecting the financial system and following global rules.

This difference matters because the central bank remains cautious about privately created digital currencies, particularly if stablecoins gain popularity for everyday purchases. So, the new guidelines aren’t a step back, but rather a fine-tuning of existing rules. Britain is aiming for a balance – encouraging innovation in the crypto space while avoiding risks to the financial system. They’re trying to avoid both overly strict regulations and a completely open approach.

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2026-05-14 11:44