Bank of England Deputy Governor: UK may need to provide similar banking deposit protection mechanism for stablecoin deposits

According to Bloomberg, Bank of England Deputy Governor Dave Ramsden suggested that the UK may need to provide a similar banking deposit protection mechanism for stablecoin deposits. Ramsden highlighted the importance of maintaining public trust in currency in the event of a systemically important stablecoin collapse. He proposed that long-term trust in stablecoins may require establishing a plan similar to bank deposit insurance and ensuring stablecoin holders have priority creditor status in insolvency proceedings within the legal settlement arrangements. Ramsden's remarks indicate that the Bank of England may extend the protection measures currently in place for bank deposits to widely used stablecoins. The Bank of England has raised the protection limit for UK citizens' 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.

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