{"id":15798,"date":"2025-11-12T08:14:11","date_gmt":"2025-11-12T08:14:11","guid":{"rendered":"https:\/\/bitunikey.com\/news\/softening-stablecoin-stance-could-rattle-uk-credit-markets-boe-deputy-warns\/"},"modified":"2025-11-12T08:14:21","modified_gmt":"2025-11-12T08:14:21","slug":"softening-stablecoin-stance-could-rattle-uk-credit-markets-boe-deputy-warns","status":"publish","type":"post","link":"https:\/\/bitunikey.com\/news\/softening-stablecoin-stance-could-rattle-uk-credit-markets-boe-deputy-warns\/","title":{"rendered":"Softening stablecoin stance could rattle UK credit markets, BoE deputy warns"},"content":{"rendered":"<p><\/p>\n<div class=\"post-detail__content blocks\">\n<p class=\"is-style-lead\">If the UK softens its stance towards stablecoins, it could pose risks to financial stability and trigger a credit crunch, according to the Bank of England\u2019s deputy governor, Sarah Breeden, who has recently defended the central bank\u2019s proposed holding limits and liquidity rules for stablecoin issuers.<\/p>\n<div id=\"cn-block-summary-block_d352070f3eee2d3c5f15ff429a73188a\" class=\"cn-block-summary\">\n<div class=\"cn-block-summary__nav tabs\">\n        <span class=\"tabs__item is-selected\">Summary<\/span>\n    <\/div>\n<div class=\"cn-block-summary__content\">\n<ul class=\"wp-block-list\">\n<li>BoE deputy Sarah Breeden says strict stablecoin rules are necessary to preserve economic stability.<\/li>\n<li>The central bank has proposed stablecoin holding limitations, which critics argue could drive away innovation.<\/li>\n<\/ul><\/div>\n<\/div>\n<p><!-- .cn-block-summary --><\/p>\n<p>Speaking to Reuters, Breeden touched upon how the UK\u2019s approach was necessarily more cautious when placed side by side with the U.S., because of a \u201cdifferent set of risks\u201d tied to the country\u2019s heavy reliance on bank lending and the structural adjustments needed to accommodate this \u201cnew form of money.\u201d<\/p>\n<p>Breeden\u2019s <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/sustainability\/boards-policy-regulation\/bank-englands-breeden-says-diluting-stablecoin-rules-further-could-damage-2025-11-11\/\" target=\"_blank\" rel=\"nofollow\">comments<\/a> come in response to mounting industry backlash over the stringent proposals that the central bank unveiled earlier this week, after several years of consultation and debate around how stablecoins should fit into the UK\u2019s financial system.<\/p>\n<p>On Monday, the BoE unveiled the UK\u2019s first formal regulatory framework for stablecoins, but placed a cap of 20,000 pounds on individual holdings and 10 million pounds for businesses. If that wasn\u2019t enough, the proposal also requires issuers to keep 40% of their reserve assets in non-interest-bearing deposits at the central bank.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p>\n<h1 class=\"wp-block-heading\">BoE deputy backs stablecoin rules<\/h1>\n<p>Breeden said that protections like the 40% deposit rule were \u201cgrounded\u201d in past incidents that highlighted systemic vulnerabilities.<\/p>\n<p>She specifically highlighted the collapse of Silicon Valley Bank back in 2023, when Circle\u2019s USDC lost its peg after billions in reserves were frozen.<\/p>\n<p>Further defending the restrictions, Breeden said the rules can potentially \u201chalve the stress\u201d on banks by limiting large outflows of deposits that might otherwise be used to purchase stablecoins, thereby cushioning the impact on credit creation and lending activity across the country.<\/p>\n<p>She did not disclose when these limitations may be lifted; however, last month, she told the media they were a temporary measure.<\/p>\n<p>\u201cWe want to support such a role for stablecoins as part of a multi-money system,\u201d Breeden said at the time.<\/p>\n<p>In the meantime, critics of the proposal have argued that this approach could drive innovation and investment toward more accommodating jurisdictions.<\/p>\n<p>The BoE has launched a consultation that is open until Feb. 10, next year, which the bank will consider before finalizing the rules by the end of 2026.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>If the UK softens its stance towards stablecoins, it could pose risks to financial stability and trigger a credit crunch, according to the Bank of England\u2019s deputy governor, Sarah Breeden,&hellip;<\/p>\n","protected":false},"author":1,"featured_media":12580,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-15798","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/15798","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=15798"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/15798\/revisions"}],"predecessor-version":[{"id":15799,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/15798\/revisions\/15799"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/12580"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=15798"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=15798"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=15798"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}