🇬🇧 BoE’s Stablecoin Saga: £20K Cap or Financial Farce? 😂

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The Great Stablecoin Shuffle: A Tale of Bureaucratic Ballet 💃

Why did the BoE toss its 2023 stablecoin proposals into the dustbin of history? 🗑️

Ah, the eternal dance of the regulators! To appease the industry’s whining and mimic the frameworks of their transatlantic cousins, of course. 🌉

When will these rules finally shackle the crypto masses? ⏳

Fear not, dear reader, for the Bank of England shall unveil its final edicts in the second half of 2026, after a grand review of industry grumblings early next year. 📜

In the latest twist of this financial farce, the BoE has proposed a 60/40 formula for Sterling-based stablecoins. 🧮 Sixty percent of reserves in interest-bearing T-bills, and forty percent parked with the bank, gathering dust like an unwanted relative. 🏦

Contrast this with the U.S. GENIUS Act, which demands a full 100% reserve backing in T-bills or cash equivalents, leaving issuers to bask in the glory of their yields. 🇺🇸💰

The BoE’s volte-face comes after the industry threw a tantrum over the 2023 proposal, which would have forced 100% of reserves into the bank’s coffers, yield-free. 😡

“Inconsistent with U.S. law!” they cried. “A blow to the stablecoin revenue model!” they wailed. And the BoE, ever the genteel host, bowed to their demands. 🎭

Governor Andrew Bailey, with a straight face, declared:

“We have listened carefully to and are grateful for the feedback received, which has shaped the proposals we are consulting on today. Following this consultation, we will consider the feedback received before consulting on and finalising our rules in 2026.” 🧐

The £20K Cap: A Financial Straitjacket? 🤹‍♂️

Despite this softening on reserves, the BoE clings to its controversial stablecoin caps like a miser to his gold. £20K for individuals and £30 million for businesses. 🤑

Curious, is it not, that major financial hubs lack such draconian restrictions? But the BoE, ever the prudent nanny, insists it will:

“Cap potential outflows of bank deposits to systemic stablecoins in aggregate and so limit the potential impact on credit availability.” 👵

These “systemic stablecoins,” the Sterling-based doppelgängers of USDT or USDC, will fall under the bank’s watchful eye. Meanwhile, the FCA shall monitor the “non-systematic stablecoins,” the wildlings of the crypto realm. 🧙‍♂️

And the yield? Ah, the issuers shall keep it, like a dog with a bone, rather than sharing it with the holders. 🐶

The Long March to Implementation: A Timeline of Tortoise-Like Progress 🐢

By February 2026, the regulator will gather its feedback, and by the second half of that year, the rules shall go live. A mere two years to finalize what the U.S. has already put into motion. 🌍

While the U.K.’s approach mirrors the U.S. framework, it is a more cautious dance, a waltz rather than a jig, to guard against systemic risks. 🕺

And in a surprising twist, the U.K. has softened its stance on retail crypto ETNs. A small victory, perhaps, in this grand bureaucratic ballet. 🎉

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2025-11-11 11:30