Deputy Governor of the Bank of England: The UK may need to provide a bank deposit-like protection mechanism for stablecoin deposits

PANews January 15 News, according to Bloomberg, the Deputy Governor of the Bank of England, Dave Ramsden, stated that the UK may need to provide a protection mechanism similar to bank deposits for stablecoin deposits. Ramsden pointed out that the central bank is considering how to maintain public trust in the currency in the event of a systemic stablecoin collapse. He suggested that long-term trust in stablecoins might require establishing a plan similar to deposit insurance and ensuring that stablecoin holders have priority creditor status in statutory liquidation arrangements.

Ramsden’s remarks indicate that the Bank of England may extend current protections for bank deposits to widely used stablecoins. The Bank of England has raised the protection limit for UK residents’ regular cash deposits from £85,000 to £120,000 to prevent bank failures. The Bank of England plans to implement stablecoin regulatory rules by the end of the year.