BoE Reportedly Planning Waivers on Limits

The Bank of England (BoE) is planning exemptions to its proposed limits on stablecoins holdings, Bloomberg reported on Tuesday.

The BoE will grant waivers to some firms that need to hold large amounts of tokens, like crypto exchanges, the report said, citing a person familiar with the matter.

The U.K.’s central bank will also allow firms to use stablecoins for settlement in its Digital Securities Sandbox, the people said.

Stablecoins are digital tokens tied to the value of traditional financial (TradFi) assets such as fiat currencies.

Last month, it was reported that BoE officials planned to impose caps of 10,000-20,000 pounds ($13,400-$26,800) for individuals and 10 million pounds ($13.4 million) on stablecoins.

Digital asset industry figures criticized the plans as unworkable.

BoE governor Andrew Bailey expressed skepticism about stablecoins in July, highlighting possible threats to financial stability and warned global investment banks against developing their own.

Stablecoins have ascended to an even higher prominence in the crypto industry over the last year, with greater interest from TradFi institutions and the introduction of formal regulatory regimes for their governance in places like the U.S. and Hong Kong.

The stern approach to restricting their use previously hinted at by the BoE therefore appeared to demonstrate the U.K. being out of step with other major financial jurisdictions.

The BoE did not respond to CoinDesk’s request for comment.