BoE Unveils Plan To Regulate Digital Pound
The Bank of England and the Financial Conduct Authority (FCA) have proposed a regulation for a stablecoin pegged to the value of the British pound.
The rules would require providers of digital cryptoasset storage to always allow withdrawals of the stablecoin at the value of the pound, protecting the UK stablecoin’s value from dropping below the value of sterling.
Issuers of the coin would also be required to back it with deposits at the centralised Bank of England, rather than a commercial bank.
The proposals aim to support safe innovation, help firms understand risks, and ensure public confidence in digital money and payments.
CryptoUK, the British industry body for cryptoassets, welcomed the proposal and plans to form a working group to provide a unified response.
Progress on implementing the digital pound has been slow due to concerns about privacy and public scepticism.
(With inputs from Shikha Singh)
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