The Bank of England (BoE) says it will lift its planned cap on stablecoins only once it is sure that the move won’t create a new risk to the financial system.
Under the new rules, the BoE will limit the total amount of blockchain‑based stablecoins that UK firms can hold. The regulator has put the ceiling in place to keep a close watch on how those digital currencies could affect banking and market stability.
In a statement, BoE officials explained that any decision on raising the cap will depend on evidence that stablecoins are safe and that they do not threaten consumer protection or the stability of the UK’s financial markets. The agency wants to make sure that all risks are understood before loosening restrictions.
Financial experts note that stablecoins are a type of cryptocurrency backed by a reserve, usually in a fiat currency like the pound. They’ve become popular for their lower volatility compared to other digital coins. However, regulators worldwide are careful because these assets can cross borders quickly and could affect traditional banking systems.
The BoE’s approach reflects a cautious stance. The agency monitors technology trends, market behaviour and the regulatory environment. Once it has data showing that stablecoins do not pose a threat to systemic security, the regulator will consider easing the cap.
For now, the stablecoin ceiling remains in force. UK banks and fintech firms must comply while the BoE continues to evaluate the landscape. The Bank’s decision will shape how digital currencies evolve in Britain and will also signal what other countries may do with their own stablecoin rules.
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