Bank of England sounds alarm on stablecoin oversight issues

The Bank of England’s Financial Policy Committee raised concerns about the risks stablecoins pose to UK financial stability due to poor oversight and asset backing. They are developing regulatory regimes to ensure stablecoins can meet redemption requests and maintain parity in volatile markets. The committee also highlighted concerns about asset quality and foreign denomination of stablecoins, warning of potential spillovers to core financial markets. The FPC supports global efforts to regulate stablecoins and will continue monitoring the sector’s growth.