Bank of England Deputy Governor: Systemic stablecoins can hold "a portion" of government bonds

Jinse Finance reported that in a speech today, Bank of England Deputy Governor Sarah Breeden discussed stablecoins. When the central bank announced its stablecoin plans in 2023, the framework was not attractive to large or systemically important stablecoin issuers. Although the good news is that they can deposit their reserves at the central bank—which is considered desirable by most—the bad news is that these reserves would not earn any interest, undermining the current main business model. Breeden had previously hinted at softening this stance, and in her speech today, she made it clear that systemically important stablecoin issuers will be able to hold part of their backing assets in high-quality liquid assets, such as short-term government bonds. She also pointed out that the initial stablecoin plan mainly focused on retail use cases, but the situation has now changed. Currently, in the UK's Digital Securities Sandbox, both stablecoins and tokenized deposits will be used for the settlement of tokenized securities. This is a relatively new development, as stablecoins were initially excluded from the sandbox.