Stablecoin Regulations: The Problem of Insufficient Industry Participation The Bank of England, the UK's central bank, has indicated a potential re-evaluation of its draft stablecoin regulations, citing a lack of communication with the industry during discussions surrounding the proposals, which were announced in November 2025. Concerns have been raised that the provisions related to stablecoin reserve requirements and holding limits have only drawn criticism without concrete alternatives being proposed, necessitating a review. This issue is gaining significant importance amidst a global trend to establish clear regulatory standards for the cryptocurrency and digital asset markets. A key aspect of the proposed regulations is the requirement for issuers of 'systemic' sterling stablecoins, which are likely to be widely used for everyday payments, to hold 40% of their reserves as non-interest-bearing deposits at the Bank of England. The regulations also include limits on stablecoin holdings: £20,000 (approximately 33 million KRW) for individuals and £10 million (approximately 16.5 billion KRW) for corporations. Deputy Governor Sarah Breeden, appearing before a UK House of Commons committee, acknowledged that the proposed regulations might not be the optimal approach for financial stability. She stated that the Bank of England is 'genuinely open' to alternative approaches that could achieve financial stability objectives without such restrictions. However, she strongly criticized the 'lack of constructive alternatives from the industry.' Deputy Governor Breeden lamented that while the question 'Why don't you do it this way?' should be continuously posed, the only response received has been 'Don't do this,' raising concerns about the industry's passive stance. Her remarks underscore the importance of productive dialogue between regulators and the industry, suggesting that presenting practical alternatives beyond mere opposition is crucial in the regulatory development process. The Bank of England has made it clear that it expects more concrete proposals from the industry and is willing to revise the regulations based on these. Stablecoins have established themselves as a representative stable asset in the cryptocurrency market and are playing an increasingly important role, particularly in digital payments and asset transactions. While the Bank of England's proposed regulations are broadly similar to standards being discussed or already adopted in the United States and the European Union, their specifics reflect regional differences. For instance, the EU's 'MiCA (Markets in Crypto-Assets)' regulation governs not only general cryptocurrencies but also minute details of digital assets like stablecoins. The U.S. is also exploring regulatory directions that prioritize stability, emphasizing reserve requirements and issuer trustworthiness. However, the UK's regulatory package continues to draw criticism for being overly conservative for many businesses. Internally, the Bank of England has expressed an open mind regarding opinions that the 60:40 split structure for stablecoin-backed assets is excessively conservative and has stated that it will review this. This structure was introduced with the aim of simultaneously ensuring both the liquidity and stability of stablecoins. Specifically, this approach requires 60% of reserves to be held as liquid assets and 40% as deposits at the Bank of England, intending to ensure both the issuer's ability to meet large redemption requests and central bank oversight. However, businesses are concerned that such ratios could hinder practical operations and scalability. There are also criticisms that requiring stablecoin issuers to deposit a portion of their reserves as non-interest-bearing funds with the central bank could limit opportunities for risk diversification and effectively increase operating costs. Non-interest-bearing deposits represent a direct opportunity cost for issuers, which could ultimately be passed on to consumers. Furthermore, concerns have been raised that these requirements could impede collaboration with other companies or weaken the competitiveness of stablecoin issuers. The industry's failure to present concrete alternatives, despite expressing these concerns, forms the backdrop for Deputy Governor Breeden's criticism. Bank of England's Regulations Compared to International Standards Meanwhile, the Bank of England's actions are drawing international attention, intertwined with the UK's status as a global financial hub. Notably, sterling-denominated stablecoins currently constitute a very small niche market globally, with most stablecoins pegged to the U.S. dollar. According to source data, stablecoins are primarily used within the cryptocurrency market and have not yet been widely adopted as a means of everyday payment. Should these regulations be implemented, the future trajectory of the sterling stablecoin market remains uncertain. Deputy Governor Breeden n