Bank of England Softens Stablecoin Regime Amid Industry Pressure

The Bank of England has made significant changes to its proposed stablecoin regime, easing pressure on issuers.

The initial proposal required stablecoin reserves to be held solely in non-interest-bearing central bank deposits. However, the amended framework allows issuers to allocate up to 60% of reserves into short-term UK government bonds while keeping the remaining 40% in central bank funds.

This decision is seen as a middle ground between aggressive crypto liberalization and outright regulatory hostility. By permitting limited exposure to short-term gilts, issuers can have a modest yield model while maintaining highly liquid and low-risk reserve assets.