Bank of England Pushes for Stronger Stablecoin Regulation Amid Crypto Growth

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LONDON – The Bank of England plans to tighten rules on stablecoin regulation, stressing that tokens tied to national currencies must follow safeguards similar to banks.

Governor Andrew Bailey said stablecoins used in payments should be treated “like money.” He suggested giving issuers access to central bank accounts. Bailey argued that this move would build trust and reduce risks. Moreover, regulators view the change as urgent since stablecoins are spreading quickly into mainstream finance.

Stablecoins track the value of currencies like the dollar or pound. They already dominate crypto trading. Traders use them to move in and out of digital assets almost instantly. However, regulators doubt whether reserves are solid enough. They also warn that redemption might fail in a crisis. In addition, customers may face losses if an issuer collapses.

The UK Treasury is drafting rules for what it calls “systemic stablecoins.” Draft proposals set limits of £10,000 to £20,000 for individuals and up to £10 million for companies. The Treasury also plans exemptions for exchanges and liquidity providers. Furthermore, stablecoins could be tested as settlement tools in the BoE’s Digital Securities Sandbox. According to CoinDesk, global regulators are watching closely as the UK develops its stablecoin regulation framework.

BANK OF ENGLAND PUSHES FOR STRONGER STABLECOIN REGULATION pic.twitter.com/Qv4vjWAqsU

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Some fintech executives warn that strict rules could slow projects and push capital abroad, especially to the U.S. and Europe. Others counter that exemptions may leave space for innovation while still protecting users.

Global regulators are watching closely. Analysts say that without clear rules, banks could lose deposits and face instability. A failure of a major issuer, they add, could send shockwaves through global markets. Supporters, meanwhile, argue that strong regulation can bring advantages, including faster payments and cheaper settlements.

For the Bank of England, the task is clear. It must safeguard the system while leaving room for innovation. Many observers believe the UK’s decision could shape how other countries manage stablecoin regulation. For more insights, see our guide on the best crypto trading platforms of 2025.

Recap

• Stablecoins in payments should be treated like money.
• UK plans caps for individuals and businesses, with exemptions for some firms.
• Critics warn strict rules could shift projects abroad.
• Supporters argue oversight reduces risks and builds confidence.