Bank of England Modifies Stablecoin Backing Asset Rules

The Bank of England has issued new policy guidance and a consultation draft regarding the backing asset requirements for sterling-denominated systemic stablecoins. The revised framework permits issuers to hold a larger portion, 70%, of their assets in short-term UK government debt, an increase from the prior 60% proposal. This adjustment seeks to enhance the stability of stablecoins while supporting the viability of issuers and promoting the UK as a hub for stablecoin issuance.