Bank of England Is Finally Catching Up with the U.S. on Stablecoins – Here’s What You Need to Know

by

Key Highlights

  • Deputy Governor Sarah Breeden promises the new stablecoin rules will be up and running “just as quickly as the U.S.” (No pressure, right?)
  • Proposed rules will be unveiled on Monday, November 10 – with a consultation to follow, because who doesn’t love a good consultation?
  • The regulations will apply in the UK, with the Bank of England and the Financial Conduct Authority (FCA) keeping their watchful eyes on the situation.
  • Temporary limits of £20,000 for individuals and £10 million for businesses will be enforced until the Bank of England sorts out any potential risk to banks and mortgages. So, don’t get too excited about those crypto shopping sprees just yet!

The Bank of England (BOE) is stepping up its game, moving forward with plans to regulate stablecoins – those digital currencies backed by real assets like cash. And no, Britain isn’t falling behind the U.S. in the digital asset race (phew!).

Deputy Governor Sarah Breeden made a bold promise Wednesday, saying the new rules would be operational “just as quickly as the U.S.” because, you know, it’s important to keep up with the cool kids.

According to a Bloomberg report, the BOE will reveal the proposed rules on November 10, followed by a consultation. The rules will mainly target the “systemic” stablecoins (the ones you actually use for payments), while smaller stablecoins will get a lighter touch from the FCA. Sounds like a good ol’ “big fish, big rules” approach.

Breeden explained that the UK is moving at lightning speed to establish these rules, but – surprise, surprise – it’s a bit more cautious than the U.S. This is mostly because the UK’s mortgage market is funded by commercial banks, so temporary caps on stablecoin holdings are more relevant. In her words, coordinating these rules is “a fabulous opportunity” for the financial system (and we all love a fabulous opportunity).

Temporary limits: What’s the big deal?

Get ready for some limits! The proposed rules include temporary caps of £20,000 ($26,000) for individuals and £10 million for businesses. These limits will stay in place until the Bank of England is convinced stablecoins aren’t about to crash the banks or mess with mortgage availability. No wild crypto shopping sprees for now, folks!

Breeden tried to calm our nerves, saying the limits aren’t actually as dramatic as they sound. She’s convinced people will survive without maxing out their stablecoins on the latest gadgets. The real issue? In the UK, mortgages come from commercial banks, not government-backed entities. So, unlike the U.S., the UK’s approach has some extra “careful” steps to keep things stable. Who knew stablecoins could be so… stable?

Bailey’s Take on Stablecoins

But wait, there’s more! The Bank of England has previously warned that stablecoins might cause problems if they start threatening traditional currencies. Governor Andrew Bailey has been watching closely, making it clear that central banks need to be cautious about payment systems, and if stablecoins become a new form of money, maintaining trust in currency will be key. Basically, don’t mess up the economy!

Last month, Bailey reassured us that being cautious doesn’t mean hating on stablecoins. He’s cool with the technology, as long as it plays nice with the traditional money systems. He even hinted that a consultation paper will be coming soon, because who doesn’t love a good consultation paper?

Meanwhile, in Canada, stablecoins are also getting some love – with the Bank of Canada introducing their own federal rules for stablecoins under the 2025 budget. The Canadian government is investing $10 million to oversee the rollout, because, you know, Canada has to stay on top of things too. They’ll also spend about $5 million per year to make sure everything’s on track. So, it looks like the UK and Canada are on the same page, trying to balance innovation with stability.

Looks like stablecoin regulation is catching on worldwide. Let’s hope it all goes according to plan, and we don’t end up with a digital currency apocalypse. Stay tuned for more updates!

Read More

2025-11-06 18:03