Breeden stated, “Feedback from the industry indicates that our proposed method for implementing limits is operationally burdensome, especially as a temporary solution. We are open to exploring alternative approaches to achieve our goals.”
Additionally, the Bank of England (BOE) is considering reducing its stipulation that a minimum of 40% of stablecoin-reserved assets must be stored with the central bank, where they will not accrue interest, and that 60% should be allocated to short-term government securities in the UK. These requirements were more stringent compared to similar markets like the U.S.
Breeden remarked, “It’s not surprising that the industry wishes to retain a greater share of interest-generating assets, as this directly impacts their profits.”
Katie Haries, Coinbase’s policy head for Europe, commented via email, “These developments signal that the Bank of England is willing to re-evaluate its stablecoin regulations. We’ve consistently argued that imposing limits on stablecoin assets stifles innovation, posing serious risks to the UK’s competitive edge.”
The BOE has yet to respond to CoinDesk’s inquiry for further information.