Critics within UK's crypto community voice disapproval towards Bank of England's suggestion to limit ownership of stablecoins - according to reports
The Bank of England (BoE) has put forth a proposal to limit stablecoin ownership in the UK, a move that has been met with criticism from crypto and payment groups. The BoE's executive director for financial market infrastructure, Sasha Mills, affirmed that the limits would address financial stability risks and risks posed by newly recognized systemic payment systems as they are scaling up.
According to the BoE, the proposed limits would be between £10,000 to £20,000 for individuals and £10 million for businesses on systemic stablecoins. This proposal is more stringent than the rules in the US and the European Union (EU) for the stablecoin market. The BoE believes that the limits would mitigate financial stability risks and risks posed by newly recognized systemic payment systems.
Sarah Breeden, Deputy Governor for Financial Stability at the BoE, has shared her vision for a "multi-money" system that includes stablecoins and other traditional assets in the UK. She has affirmed the need to keep up with global developments as new payment options emerge. However, crypto and payment groups argue that the proposed limits would put the UK at a disadvantage and be difficult and costly for issuers to implement.
Gilles Chemla, a professor at Imperial Business School, has warned that the UK is falling behind on stablecoin regulation. He believes that stablecoins are no longer experimental technologies - they are becoming the foundation of the global digital economy. Chemla stated that the delay in implementing a regulatory framework for stablecoins is eroding the UK's advantage in leading the digital economy.
The UK has already set out the necessary legislation for a regulatory regime for stablecoins in 2023. The BoE and the Financial Conduct Authority (FCA) have been engaging with the industry to develop more detailed rules of that regime throughout this year. The BoE's plan is similar to its proposed approach to the digital pound, addressing financial stability risks associated with deposits flowing out of the banking system.
The BoE's proposal aims to learn about bank disintermediation associated with stablecoin use and its impact on credit cost and availability. No information was provided about any other major jurisdiction implementing caps on stablecoin ownership. The search results do not provide information about an organization making an official proposal to the Bank of England to avoid regulations on limiting stablecoin ownership in the UK.
The United Arab Emirates (UAE) has taken steps in the global war on crypto crime, but details were not provided in this paragraph. It remains to be seen how the BoE's proposal will be received and implemented in the UK, and whether other countries will follow suit. The BoE has stated that its proposed limits on stablecoin ownership could be "transitional" as the financial system adjusts to the growth of digital money.
Read also:
- Transforming Digital Inventories in the Food Industry: A Comprehensive Guide for Food Businesses
- 1. Key Points for August 14: Gathering in Alaska, Immigration Enforcement (ICE), Financial service Zelle, Infowars, and Air Canada Airline Incidents
- Automobile manufacturer IM Motors reveals an extended-range powertrain akin to installing an internal combustion engine in a Tesla Model Y.
- Conflict Erupts Between Musk and Apple Over Apple Store's Neglect of Grok
