Bank of England warns of potential disruptions to financial stability with crypto stablecoins and considers urgent deposit guarantee scheme reform.

The Bank of England has warned that regulators may need to introduce limits on the use of stablecoins in payments to prevent potential threats to financial stability. Stablecoins are cryptocurrency tokens that aim to mirror the value of traditional assets such as fiat currencies. Regulators are concerned about the assets that underpin their value, and the potential risks they may pose to the financial system if they become greater competitors to fiat money. The British government is consulting on new regulation to address the risks posed by digital currencies to consumers, while also seeking to ensure the country is seen as a place for crypto firms to do business.