FX.co ★ Bank of England plans series of stablecoin-related reforms

According to media reports, the Bank of England is preparing to introduce exceptions to its proposed restrictions on stablecoins — a move signaling a shift in approach as the UK faces growing pressure to remain competitive with US crypto regulations.

The UK's central bank reportedly intends to grant exemptions to certain firms, including cryptocurrency exchanges that need to hold large amounts of stablecoins, and to permit the use of stablecoins as settlement assets within its experimental Digital Securities Sandbox.

This decision is expected to mark a significant step toward integrating cryptocurrencies into the UK's traditional financial system. Allowing exemptions for crypto-related companies would enable them to manage assets more efficiently and simplify stablecoin-based transactions.

Using stablecoins as settlement instruments within the digital securities sandbox also opens a range of exciting opportunities. It will allow companies to experiment with new technologies and business models related to asset tokenization. The sandbox will serve as a controlled environment for testing these innovations, helping regulators assess both the risks and benefits of using crypto assets at scale.

Previous Bank of England proposals included stablecoin holding limits — £20,000 for individuals and £10 million for corporations. These thresholds are expected to be re-examined during public consultations scheduled for later this year.

The consideration of possible exemptions follows widespread industry concern over the proposed limits and criticism that the UK risks falling behind markets, in particular the US, which recently passed the GENIUS Act, establishing a regulatory framework for dollar-backed stablecoins.

In a recent interview, Bank of England Governor Andrew Bailey struck a softer tone, suggesting that stablecoins and traditional finance can coexist:

"I don't share the view that they must be seen as competitors. I recognize their potential to drive innovation in payment systems, both domestically and internationally. However, practice matters — it is crucial that these stablecoins meet conditions ensuring public confidence," Bailey said.

Trading recommendations

Bitcoin Buyers are now aiming to reclaim the $124,400 level, which would open a direct path toward $126,400, with the next target at $129,100. The ultimate bullish goal lies near $131,100 — a breakout above this zone would signal a strengthening of the bull market. In case of a decline, buyers are expected to defend $122,200. A drop below this support could quickly push BTC down toward $119,700, with $117,100 as the deepest bearish target.

Ethereum A solid move above $4,502 paves the way toward $4,582, with the next resistance at $4,651. A breakout above this level would confirm renewed bullish momentum and stronger buyer interest. If ETH falls, buyers are likely to step in around $4,403. A move back below this area could send Ethereum down toward $4,318, with $4,244 as the ultimate downside target.

What's on the chart

• The red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.