The Deputy Governor of the Bank of England, Sarah Breeden, expressed her disappointment regarding the lack of constructive feedback on the bank’s proposed regulations for stablecoins pegged to the British pound. She mentioned that the Bank is “genuinely open” to modifying its initial proposals.

In summary, the sought-after regulatory framework aims to ensure that sterling-backed stablecoins remain safeguarded and redeemable at their nominal value. The guidelines also stipulate rigorous supervision by the Bank of England for issuers designated as systemic by the Treasury. Furthermore, issuers are required to fully secure their coins with high-quality assets.

Key Rules Include:

• Systemic issuers must maintain at least 40% of their reserves as deposits at the Bank of England.
• A maximum of 60% can be held in short-term UK government securities.
• Coins must be redeemable at par.
• Issuers need to maintain robust business models.
• Stablecoins primarily used for trading must comply with regulations from the Financial Conduct Authority (FCA).