Bank of England hints at easing stablecoin holding limits in response to industry technical implementation challenges

Gate News reports that on March 12, UK Deputy Bank of England Governor Sarah Breeden stated during a House of Lords committee hearing that regulators may adjust their strict stance on setting limits for stablecoin holdings, which had previously faced strong opposition from the digital asset industry. In November last year, the Bank proposed a temporary cap on holdings of systemically important stablecoins: £20,000 for individuals and £10 million for businesses, aiming to prevent risks from sudden customer deposit withdrawals to stablecoins. However, stablecoin issuers and the crypto industry warned that these limits would be difficult to enforce and could stifle innovation. Breeden said the Bank is open to “other ways” to achieve the goal of protecting the UK economy and is reviewing feedback received on the consultation document from November. She acknowledged technical challenges in implementing the cap, 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 Bank plans to finalize regulations by the end of the year.