Bank of England reviews allowing exceptions to stablecoin holding limits

The Bank of England is reported to be pursuing measures to partially exempt certain firms from stablecoin holding limits. As the United States rapidly establishes regulations for dollar-linked stablecoins, the UK appears to be opting for a flexible approach to maintain competitiveness.

On the 8th (local time), Bloomberg reported that the Bank of England is preparing measures to exempt or relax holding limit regulations for certain firms—such as virtual asset (cryptocurrency) exchanges—that require large stablecoin holdings. It also plans to allow stablecoins to be used as a means of payment within the Digital Securities Sandbox, a digital securities testing platform.

The Bank of England had initially proposed limiting individuals' stablecoin holdings to 20,000 pounds (about $26,800) and companies' holdings to 10 million pounds (about $13.4 million). Specific detailed criteria are scheduled to be released in the second half of this year, and this review of easing measures is said to have come after strong industry backlash.

The virtual asset industry had earlier criticized that such limit regulations would weaken the UK's cryptocurrency competitiveness. In particular, analysts say that the US's recent passage of the 'GENIUS Act' under the Trump administration, which clarified regulations for dollar-linked stablecoins, has put pressure on the UK government.

Andrew Bailey, governor of the Bank of England, has also recently softened his stance. In an op-ed for the Financial Times (FT), he said, "It is not right to be opposed to stablecoins in principle," and added, "I recognize their potential to contribute to innovation in domestic and international payment systems." He added, "However, conditions to secure public trust must be met."