Bank of England Signals Stablecoins May Hold Government Bonds

Deputy Governor Sarah Breeden said systemic stablecoins could be allowed limited exposure to government bonds under the UK’s regulatory framework.

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Terms & Concepts
  • Stablecoin: A type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset such as fiat currency or government bonds.
  • Systemic Stablecoin: A stablecoin deemed large or critical enough to potentially affect financial stability, thus subject to stricter regulatory oversight.
  • Government Bonds: Debt securities issued by a government to support spending and obligations, considered low-risk assets often held by financial institutions.