Bank of England Vows to Issue Stablecoin Regs ‘Just as Quickly as the U.S.’

“Our aim is to make sure that our regime is up and running, just as quickly as the US,” Breeden said at the SALT conference in London, according to a Bloomberg report. “It’s really important that we do this together and it’s a fabulous opportunity.”

The Bank of England plans to unveil its proposed regime on Monday, with rules expected to be operational by the end of next year.

Paul Howard, senior director at crypto trading firm Wincent, welcomed Breeden’s timeline pledge, saying it’s “great news that the UK will be up and running just as quickly as the U.S., where we have witnessed leadership from the very top,” per Decrypt.

He noted that financial services make up 40% of Great Britain’s GDP, making rules to allow stablecoins to be issued and traded “paramount to safeguard U.K. jobs and economic development,” particularly given the country’s history as a center for foreign currency exchange.

The BoE proposal will include temporary caps of $26,087 (£20,000) for individuals and $13.3 million (£10 million) for businesses, according to Bloomberg, though exemptions for large crypto exchanges and institutional players are expected. The possibility of exemptions for large exchanges were first floated last month, after crypto industry groups voiced opposition to reports that the stablecoin framework would include holding caps, Bloomberg reported. Even with the likelihood of exemptions, some crypto groups remain opposed to caps on non-exempt traders, claiming any cap would be too difficult to enforce.

Related: Fed Considering Payment-Only Master Accounts for Crypto Banks

“While there are indications in the press that this policy may be under review, we believe it remains critically important that these limits are recalibrated,” Simon Jennings, executive director of the UK Crypto-asset Business Council, told Decrypt. A cap on retail users, he warned, could be “cumbersome, costly and potentially unworkable” in practice.

Since enactment of the GENIUS Act, stablecoin activity has risen rapidly in the U.S. The total stablecoin market capitalization currently stands at $304 billion, according to Coingecko. That’s equivalent to roughly 11% of total cash in circulation.

The BoE cited concerns among banks and financial institutions that unrestricted use of stablecoins could drain deposits from traditional accounts as the reason for the proposed caps. A similar concern among banks led to opposition to stablecoins in the U.S. The GENIUS Act did not impose caps on stablecoin holdings, although it does include issuance caps of $10-$50 billion depending on the size of the issuer.

BoE officials indicated the holding caps could eventually be lifted once the effect of stablecoins on traditional bank deposits becomes clear.