Bank of England prepares new rules for stablecoins following the example of the US

Key Points:

• The Bank of England is preparing new rules for stablecoins to keep pace with the US in regulating digital assets.
• A dual-tier control system and temporary limits on the use of stablecoins are planned.

According to Bloomberg, the Bank of England is preparing new rules for regulating stablecoins. The initiative is aimed at keeping pace with the United States in developing digital asset regulation.

Deputy Governor of the Bank of England Sarah Breeden denied rumors that the UK is lagging behind America. She said that on November 10, the Bank will publish the results of consultations on the regulation of stablecoins.

Dual-tier control system

The new system will be divided into two tiers. In the first stage, the rules will apply to large stablecoins that can play an important role in payments. Smaller projects will remain under the supervision of the Financial Conduct Authority (FCA) and will be subject to more simplified requirements.

This approach will support the development of new technologies without posing a threat to the financial system.

The new rules propose setting temporary limits on the use of stablecoins: up to 20 000 sterling pounds (about $26 000) for individuals and up to 10 million sterling pounds ($13,1 million) for companies.

Sarah Breeden explained that these restrictions are related to the British mortgage market’s dependence on banks. If customers quickly transfer their deposits to stablecoins, it could weaken the banking system.

The initiative comes amid growing pressure on the UK, which is keen to maintain its position in the global race for leadership in the cryptocurrency sphere.

Earlier, the FCA lifted a four-year ban on cryptocurrency exchange-traded notes (ETNs). Now, such instruments are available not only to professional investors but also to a wider audience.

The Bank of England has already announced that it plans to introduce a comprehensive regulatory framework for stablecoins by the end of 2026. They will be treated as traditional money and subject to the same requirements, including reserve and user protection.