BOE Defends 40% Stablecoin Reserve Rule After USDC Collapse 🏦

[kevin1]

The Bank of England is proposing that stablecoin issuers hold 40% of reserves at the central bank — without earning interest.

Deputy governor Sarah Breeden pointed to Circle’s USDC depeg in March 2023 as proof that stronger backing rules are needed.

The policy aims to protect consumers and prevent contagion risks as the UK builds its new digital money framework, set for finalization next year.

[Rimon Khan]

A stricter reserve rule might slow growth, but it boosts trust.

[EmTeam]

BOE’s 40% rule feels heavy-handed — balance between safety and innovation is key. ️