Market News

UK Prepares to Launch Comprehensive Stablecoin Regulations to Match the US

The Bank of England (BOE) is on the brink of unveiling a new regulatory framework aimed at stablecoins.

Set for release on November 10, the framework seeks to align UK regulations with the rapid developments in the US stablecoin market.

Deputy Governor Sarah Breeden has assured that the UK’s approach will be implemented "just as quickly as in the US," countering concerns about regulatory lag.

The new regulations will focus primarily on "systemic" stablecoins while allowing smaller tokens to operate under a more lenient regime led by the Financial Conduct Authority.

Temporary limits will be imposed on holdings, capping individual investors at £20,000 and businesses at £10 million, a measure intended to stabilize the financial market during the transition period.

Breeden highlighted the importance of protecting bank balance sheets and mortgage availability, given the UK's unique reliance on commercial bank lending.

To further enhance the UK’s competitiveness, the government is also moving to appoint a "digital markets champion" tasked with spearheading blockchain innovations in finance.

Additionally, the Financial Conduct Authority has recently lifted its ban on crypto exchange-traded notes, expanding access for both institutional and retail investors.

These initiatives underscore the UK’s ambition to not only foster innovation in the crypto space but also to ensure a regulatory framework that promotes stability and security.

As the landscape evolves quickly, the UK is positioning itself as a major player in the burgeoning global stablecoin sector.