Bank of England Exempts Crypto Exchanges from Strict Stablecoin Limits in New Regulatory Framework

The Bank of England (BoE) is preparing to introduce significant exemptions to its proposed stablecoin holding restrictions, according to a Bloomberg report. The UK central bank will provide regulatory waivers for cryptocurrency exchanges and other firms requiring large-scale stablecoin holdings for operational purposes. Additionally, the BoE will permit the use of stablecoins for settlement activities within its innovative Digital Securities Sandbox initiative. This regulatory adjustment comes after previous proposals suggested individual holding limits of £10,000-£20,000 and corporate caps of £10 million, which faced substantial criticism from digital asset industry leaders who deemed them impractical. While BoE Governor Andrew Bailey previously expressed concerns about stablecoins' potential financial stability risks, these new exemptions signal a more nuanced approach to cryptocurrency regulation, potentially aligning the UK with other major financial centers like the US and Hong Kong that are developing comprehensive stablecoin frameworks.