UK to Cap Stablecoin Use in New Regulatory Blueprint
Citing a need to protect its mortgage market, the UK will propose strict caps on stablecoin transactions as part of its new regulatory framework. The Bank of England‘s consultation, due November 10, will recommend limiting individuals to £20,000 and businesses to £10 million in stablecoin transactions.
Deputy Governor Sarah Breeden explained to Bloomberg that the UK’s financial system, where mortgages are predominantly provided by banks, is uniquely vulnerable to a rapid flight of deposits into stablecoins.
The proposed rules aim to manage this risk while still fostering innovation. The regime will be two-tiered, with the BoE directly supervising only the most significant “systemic” payment stablecoins.
The move is part of a concerted effort to keep the UK’s crypto regulations competitive with the US, with Breeden pledging the UK’s rules will be operational “just as quickly.”
