Bank of England Shifts Stance on UK Stablecoin Regulation

The Bank of England is changing course on stablecoins. Deputy Governor Sarah Breeden appeared before the House of Lords Financial Services Regulation Committee on March 11. She told lawmakers the central bank is open to revisiting some of its earlier positions.

on X reported the BOE is "evolving to a more friendly stance" on stablecoins. That is a meaningful turn for a jurisdiction widely seen as one of the more cautious on digital asset policy.

Breeden's Testimony Rattles Old Assumptions

The BOE published its stablecoin regulatory framework last year. Critics responded fast. One authority publicly described the approach as "disproportionately cautious and restrictive." The backlash did not go unnoticed.

Speaking directly to peers at the House of Lords, Breeden said the bank is willing to reconsider its position on certain key issues, per Parliament records. That kind of statement from a deputy governor carries weight. Sasha Mills, the BOE's Executive Director of Financial Market Infrastructure, also gave evidence at the same session.

You might also like: Revolut Secures UK Banking License, Expands Crypto-Friendly Financial Services

The committee, chaired by Baroness Noakes DBE, is running a broader inquiry into stablecoin growth and regulation across the UK. Topics on the table include technology risks, illicit finance, and the BOE's proposed systemic stablecoin regime.

Chainalysis Enters the Room

Matthias Bauer-Langgartner, Head of Policy for Europe at Chainalysis, also testified that morning. He appeared after the BOE officials. His evidence focused on illicit transaction risks tied to stablecoin usage, according to the oral evidence session.

That combination of voices, a central bank and a blockchain analytics firm, in the same inquiry room tells its own story. The UK is working through questions it has long postponed.

Must read: Stablecoin Supply Hits $315B as Crypto Market Remains Range-Bound

What the Shift Actually Means

The Financial Services Regulation Committee was formed after the Financial Services and Markets Act 2023. That law repealed retained EU financial rules and set up a new UK-specific framework. Stablecoin regulation sits inside that wider overhaul.

Breeden's words do not equal a formal policy change. Still, public signals from the BOE at the Lords level are not routine. Issuers and market participants have been waiting a long time for London to move.

As BSCNews noted on X, the tone shift reads as bullish for stablecoin development in the UK. That is not hard to understand given how long the sector has been stalled on regulatory clarity from British authorities.

You might also like: XRP Binance Withdrawals Spike as ETF Inflows Cross $1.4B