BoE deputy governor suggests UK may extend bank-style protections to stablecoin deposits
Bank of England Deputy Governor Dave Ramsden said the UK may need protections for stablecoin deposits similar to bank deposit insurance. Ramsden said the BoE is exploring how to maintain public confidence in the currency if a systemically important stablecoin fails. He proposed a long-term insurance-like scheme for stablecoin holders and statutory resolution rules that would give stablecoin holders preferred creditor status in insolvency. The remarks imply the BoE could extend existing protections for bank deposits — the UK recently raised the insured cash deposit ceiling from £85,000 to £120,000 — to widely used stablecoins. The Bank plans to implement stablecoin regulation by year-end. (Main keywords: stablecoin, Bank of England, deposit insurance, regulation)
Neutral
The announcement is neutral overall for crypto markets. It signals stronger regulatory recognition of stablecoins and potential protections for holders, which reduces counterparty risk and could support stablecoin adoption — a mildly bullish structural factor. At the same time, stricter statutory rules and resolution frameworks increase compliance costs for issuers and may constrain certain stablecoin business models, a cautious or bearish factor for some projects. Short-term market reaction is likely muted: policy proposals and regulatory planning typically create uncertainty but not immediate price moves. In the medium-to-long term, clearer regulation and depositor-like protections can increase institutional and retail confidence in stablecoins, supporting on- and off-ramps and trading volumes. Historical parallels: regulatory clarifications after major stablecoin or crypto incidents (e.g., Tether scrutiny, Terra collapse) led to both temporary volatility and eventual segmentation of market share toward regulated or reserve-backed issuers. Traders should watch consultation details, scope of "preferred creditor" protections, timing of rules, and which stablecoins qualify — these determine who benefits and which issuers face costs. Key market signals: issuance/redeemability changes, custody and reserve requirements, and announcements by major issuers or custodians responding to new rules.