Bank of England Deputy Governor Sarah Breeden said that the central bank’s planned restrictions on stablecoin holdings and transaction sizes will only be temporary. The move is meant to maintain stability in the financial system while the market adjusts to new forms of digital money.
The proposal to cap stablecoin usage was first raised in a discussion paper in November 2023, aiming to prevent potential risks to financial stability. However, the plan drew strong criticism from industry groups in September, who said such limits could harm innovation and slow the growth of the UK’s digital finance sector.
Speaking at DC Fintech Week on Wednesday, Breeden clarified that the measures are a “temporary stopgap” rather than a permanent policy. She said the central bank wants to “support a role for stablecoins as part of a multi-money system.” The limits, she added, would give time for the financial system to adapt and allow the Bank of England to closely monitor stablecoin adoption and its potential impact on the structure of the wider economy.
BoE to Launch Consultation on Stablecoin Limits
Breeden said the Bank of England plans to open a public consultation before the end of the year to gather feedback on proposed stablecoin limits and their implementation process. Among the ideas under review is setting higher thresholds for businesses, with potential exemptions for supermarkets and other major firms.
“We will be consulting in coming weeks on the detail of our proposed regime for sterling stablecoins used in systemic payment systems, and we’ll be open to feedback as we finalize our rules.”
Sarah Breeden
The central bank is also considering a carveout for companies participating in the UK’s digital sandbox, a program introduced in October 2024 to allow firms to test digital ledger technologies in a controlled environment.
