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The Bank of England has released the minutes from its Financial Policy Committee (FPC) meetings held on April 4 and 8, 2025. The meetings focused on developments in the markets for unbacked cryptoassets and stablecoins. This announcement was made via a press release on April 9, 2025.
According to the Financial Policy Committee, there has been notable growth in the markets for unbacked cryptoassets and stablecoins over the past year. Regulatory frameworks are being developed both in the United Kingdom and internationally. The Bank of England, along with the Financial Conduct Authority (FCA), is working on regulations for systemic and non-systemic stablecoins, emphasizing the importance of backing assets to support redemptions during periods of financial stress. The committee highlighted that offshore sterling stablecoins with inadequate or poorly managed backing could pose risks to UK financial markets through asset sales.
The committee also reported that increased use of stablecoins in retail and wholesale cross-border payments might lead to currency substitution and heightened counterparty credit risk. It noted that while systemic risks from unbacked cryptoassets have not yet materialized, their growing size and connections to the financial system warrant attention. Several jurisdictions are implementing regulations for these assets.
