Bank of England to allow stablecoin issuers to hold short-term government bonds

Bank of England Deputy Governor Sarah Breeden announced that the central bank will relax its regulatory framework for stablecoins, permitting issuers to hold some of their backing assets in short-term government bonds. She explained that the framework published by the bank in 2023 was not ideal for issuers. Breeden noted that while the initial plans for stablecoins centered on retail applications, the landscape has shifted, and the assets are now expected to be used for settling tokenized securities.