BOE Says Stablecoins Must Meet Bank Standards

Law360, London (June 7, 2021, 6:18 PM BST) -- Digital currencies pegged to central bank cash should follow the same capital and liquidity rules that banks abide by when handling deposits, the Bank of England said Monday as it considered models for a possible central bank digital currency.

The BoE said that regulation needs to be clearly established before stablecoins can safely operate in the U.K. The currencies should follow capital and liquidity requirements set by the central bank, as well as having a backstop to compensate depositors in the event they fail, the central bank suggested.

This would replicate rules that banks already follow when holding deposits, the BoE...

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