BoE signals flexibility on stablecoin holdings amid industry pushback

The Bank of England (BoE) is reconsidering its stablecoin holding restrictions following significant cryptocurrency industry pushback, signaling a potential shift in the UK's digital asset regulatory framework. According to a Bloomberg report from October 7, 2025, BoE officials are exploring targeted exemptions for firms requiring larger stablecoin holdings for trading and market-making activities.

This regulatory flexibility represents a crucial development for the UK's cryptocurrency landscape, as authorities attempt to balance prudential risk management with maintaining London's competitive edge in the global digital finance sector. The proposed carve-outs could significantly impact stablecoin liquidity and trading operations across DeFi platforms and traditional financial institutions.

The BoE's willingness to adapt its stablecoin policy demonstrates growing recognition of digital assets' importance in modern financial markets. While specific details remain under negotiation, this regulatory pivot could position the UK as a more crypto-friendly jurisdiction, potentially attracting blockchain companies and cryptocurrency exchanges seeking clearer operational guidelines.

Market participants are closely monitoring these developments, as revised stablecoin regulations could influence broader cryptocurrency adoption and institutional investment in digital assets across European markets.