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BoE Will Step in to Rescue Collapsing Stablecoin Issuers

BoE Will Step in to Rescue Collapsing Stablecoin Issuers

(2 June 2022 – United Kingdom) The Bank of England (BoE) will assume regulatory oversight over stablecoin issuers in the event they pose a material risk to financial stability.

The BoE announced it would directly intervene to direct and oversee collapsing stablecoins should the British central bank decide that a stablecoin issuer “has reached systemic scale” according to the HM Treasury in response to a cryptocurrency consultation that commenced in Q1 2021 and concluded in early Q2 2022. In April 2022 the British government announced plans to become a “crypto asset technology hub” with 100 countries currently exploring central bank digital currencies (CBDCs), according to the International Monetary Fund (IMF) and Bank for International Settlements (BIS).

The British government clarified that “the central bank will only step in during “systemic” collapses, which it defines as any “deficiencies in a system’s design or disruption to its operation may threaten the stability of the UK financial system or have significant consequences for businesses or other interests”

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