Bank of England Warns Weak Stablecoin Rules Could Trigger Credit Crunch 💷

[kevin1]

The Bank of England’s deputy governor Sarah Breeden warned that loosening stablecoin regulation could threaten UK financial stability and spark a credit crunch.

Breeden defended the BOE’s proposal to cap individual stablecoin holdings at £10,000 and corporate holdings at £10 million, saying it would “halve the stress” on banks as customers shift deposits into digital money.

The limits, however, have drawn backlash from crypto leaders who argue the UK risks falling behind the US in innovation.

[Rimon Khan]

They’re not wrong — poorly backed stablecoins can ripple through credit markets. ️

[EmTeam]

Stablecoins might look harmless, but in scale they’re systemic.