Systemic Stablecoins | Bank of England consultation paper
In this MetaMarkets episode, hosts Jan Philipp Fritsche and Jón Egilsson unpack the Bank of England’s consultation on the regulation of sterling-denominated systemic stablecoins.
They focus on the proposed reserve structure: systemic issuers would be fully backed 1:1, with around 40% of backing assets held in unremunerated Bank of England accounts (for instant liquidity/redemptions) and the remaining 60% in short-term UK government debt (gilts)—plus discussion of potential central bank liquidity/repo-style support in stress.
Jón calls the approach progressive (notably, giving non-bank issuers direct central bank access), but flags a key concern: non-interest-bearing reserves may hurt issuer competitiveness and incentives, contrasting the UK approach with the US (more issuer-friendly) and the EU (more bank-exposed credit risk / more complex “fragmented” regulation).
Jón Egilsson — Former Chair of the Central Bank of Iceland; Co-founder of Monerium, the first company to issue fiat currency on-chain.
https://www.linkedin.com/in/egilsson
Jan Philipp Fritsche — Managing Director at Oak Security, a Web3 cybersecurity firm pioneering research on economic and systemic risks in decentralized systems.
https://www.linkedin.com/in/janf/