[Bank of England Deputy Governor: Systemic stablecoins can hold "some" government bonds] In a speech today, Bank of England Deputy Governor Sarah Breeden discussed stablecoins. When the central bank announced its stablecoin plan in 2023, the framework was not attractive for large or systemically important stablecoin issuers. The good news is that they can hold reserves at the Central Bank, which is desirable for most people, but the bad news is that these reserves will not earn any Interest, undermining the current major business model.
Briden previously hinted at softening this stance and made it clear in today's speech that issuers of systemically important stablecoins will be able to hold part of their supporting assets in high-quality liquid assets, such as short-term government bonds.
She also pointed out that the initial stablecoin plan primarily focused on retail use cases, but the situation has changed now. Currently, both stablecoins and tokenized deposits will be used for the settlement of tokenized securities in the UK's "Digital Securities Sandbox." This is a relatively new change, as stablecoins were initially excluded from the sandbox.
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Bank of England Deputy Governor: Systemic stablecoins can hold "some" government bonds
[Bank of England Deputy Governor: Systemic stablecoins can hold "some" government bonds] In a speech today, Bank of England Deputy Governor Sarah Breeden discussed stablecoins. When the central bank announced its stablecoin plan in 2023, the framework was not attractive for large or systemically important stablecoin issuers. The good news is that they can hold reserves at the Central Bank, which is desirable for most people, but the bad news is that these reserves will not earn any Interest, undermining the current major business model. Briden previously hinted at softening this stance and made it clear in today's speech that issuers of systemically important stablecoins will be able to hold part of their supporting assets in high-quality liquid assets, such as short-term government bonds. She also pointed out that the initial stablecoin plan primarily focused on retail use cases, but the situation has changed now. Currently, both stablecoins and tokenized deposits will be used for the settlement of tokenized securities in the UK's "Digital Securities Sandbox." This is a relatively new change, as stablecoins were initially excluded from the sandbox.