Bank of England Deputy Governor Sarah Breeden recently expressed disappointment over the lack of constructive feedback from the market regarding its proposed regulatory framework for pound stablecoins. The proposal aims to ensure that stablecoins pegged to the pound possess adequate robustness and redeemability, with the core objective of maintaining financial system stability.
According to the proposal, any stablecoin issuer deemed to have systemic significance by the Treasury must be subject to comprehensive regulation by the Bank of England, and each stablecoin issued must be backed by 100% high-quality liquid assets as reserves. Additionally, the regulatory framework requires issuers to establish transparent auditing mechanisms to ensure real-time verifiability of reserve assets and restrict high-risk investment behaviors to prevent liquidity mismatches.
Despite the clear regulatory intentions, some industry participants believe that the current rules are overly stringent, potentially stifling innovation and leading to business outflows. The Bank of England is currently assessing feedback from various stakeholders and considering moderate optimizations to certain provisions without compromising safety standards, in order to balance risk prevention with market development.