The Bank of England hints at possibly easing restrictions on stablecoin holdings

According to Bloomberg, Bank of England Deputy Governor Sarah Breeden hinted that regulators may soften their strict stance on the holding limits for stablecoins, following strong opposition from the digital asset industry to the proposal.

The central bank proposed last year to set temporary holding limits of £20,000 for individuals and £10 million for businesses on stablecoins deemed systemically important, to prevent the risks posed by sudden transfers of customer deposits from banks to stablecoins. However, stablecoin issuers and the crypto industry warned that these limits would be difficult to enforce and could stifle innovation. Breeden stated during her appearance before the House of Lords committee that the central bank is "open to other ways" to achieve the goal of protecting the UK economy and is reviewing the feedback received from the consultation document issued last November.

She acknowledged the technical difficulties in implementing the limits, including how to effectively track token holders and holdings in secondary market transactions, as well as the cost-effectiveness of building systems for temporary restrictions. The central bank plans to finalize the regulations by the end of the year.