Bank of England Deputy Governor: The UK may need to provide a similar guarantee mechanism for stablecoin deposits as for bank deposits.

PANews reported on January 15th, citing Bloomberg, that Bank of England Deputy Governor Dave Ramsden stated that the UK may need to provide a similar guarantee mechanism for stablecoin deposits as bank deposits. Ramsden pointed out that the central bank is considering how to maintain public confidence in the currency should a systemically important stablecoin collapse. He suggested that long-term trust in stablecoins might require establishing a scheme similar to bank deposit insurance and ensuring stablecoin holders have priority creditor status in bankruptcy proceedings within statutory liquidation arrangements.

Ramsden's comments suggest that the Bank of England may extend its current protections for bank deposits to widely used stablecoins. The Bank of England has already raised the cap on term cash deposits for British citizens from £85,000 to £120,000 to protect against bank failures. The Bank of England plans to implement stablecoin regulatory rules by the end of the year.