The Deputy Governor of the Bank of England, Sarah Breeden, has expressed disappointment over a lack of constructive engagement on the bank’s proposed regulatory framework for sterling-based stablecoins. She stated the institution remains open to revising its rules, which are designed to ensure stability and full backing by high-quality assets. Key proposals include stringent reserve requirements and mandatory supervision for systemic issuers.
The Deputy Governor of the Bank of England, Sarah Breeden, has expressed disappointment over a lack of constructive engagement regarding the bank’s proposed rules for sterling-denominated stablecoins. Breeden said the institution has been “genuinely open” to changing its proposals.
The proposed regulatory regime was designed to ensure pound-pegged stablecoins remain safe and redeemable at face value. Issuers that are designated as systemic must be supervised by the Bank of England and fully back their coins with high-quality assets.
Key requirements include holding at least 40% of reserves as deposits at the Bank of England. Up to 60% can be held in short-term UK government debt, and all coins must be redeemable at par.
Issuers are also required to maintain very resilient business models. Stablecoins predominantly used for trading would remain regulated by the country’s FCA.
