The Bank of England takes an open position on stablecoins for wholesale payments
AI Summary
According to Odaily, the Bank of England expressed a forward-looking position on digital innovation this week. Executive Director Sasha Mills stated an open position on the use of stablecoins for wholesale payments, in contrast to a recent report from the Bank for International Settlements characterizing stablecoins as 'unreliable currencies.' Mills emphasized that financial stability remains a priority, but after legal changes, the central bank must balance innovation with regulation.
This policy represents a significant shift as the Bank of England softens its stance on the use of stablecoins in wholesale markets, although it still prefers central bank currency for settlements. In the retail sector, the bank plans to ease reserve requirements, allowing some investment in high-quality assets. Additionally, it proposes temporary holding limits for individuals and businesses to prevent deposit outflows.
This comes after a warning from the Governor of the Bank of England that stablecoins pose a threat to public trust in currency.