UK crypto and payments groups urged the Bank of England to drop plans to cap individual stablecoin holdings, claiming the move would be costly and hard to enforce. United Kingdom-based cryptocurrency industry advocacy groups called on the Bank of England not to proceed with plans to limit individual stablecoin holdings. In a November 2023 discussion paper, the bank floated setting individual caps on digital pounds between 10,000 British pounds ($13,558) and 20,000 pounds and asked for feedback on a possible lower limit of 5,000 pounds. According to a Monday Financial Times report, industry groups criticized the plan, saying it would be difficult and expensive to implement and could leave the UK lagging behind other jurisdictions. Read more
Bank of England governor Andrew Bailey joins a growing list of European officials concerned with the rise of stablecoins. Bank of England (BOE) governor Andrew Bailey recently warned against banks issuing stablecoins, saying that the Bank of England should focus on tokenizing deposits instead. Stablecoins introduce systemic risks to banking institutions that could destabilize the entire financial system, causing sovereign governments to lose control over their currencies, the BOE official told The Sunday Times in an interview. He also added that the United Kingdom’s central bank should not adopt a central bank digital currency (CBDC) or otherwise seek to launch a centrally-managed digital fiat token. Read more
MiCA has had a limited impact on the adoption of compliant stablecoins in Europe, strengthening the need for the digital euro, Bank of Italy Governor Fabio Panetta said. Former European Central Bank (ECB) official and Governor of the Bank of Italy, Fabio Panetta, touted the digital euro as a key tool for controlling the risks of increasing cryptocurrency adoption. The Bank of Italy, on May 30, released an annual report with the governor’s concluding remarks on the state of the economy. Panetta said the European Union must move forward with the central bank digital currency (CBDC) project to maintain financial stability and meet demand for secure digital payments. “We would be remiss to think that the evolution of crypto-assets can be controlled only through rules and restrictions,” Panetta said, warning that crypto regulation alone cannot address the systemic risks posed by crypto, and that the digital euro would be key to addressing them. Read more