LONDON - There may need to be limits initially on the use of major stablecoins for payments, and they should also be backed by high quality and liquid assets to protect consumers, Bank of England Deputy Governor Jon Cunliffe said on Monday.
Britain is due to adopt rules for regulating stablecoins, a form of cryptocurrency backed by an asset or fiat currency, which consumers could use to make payments digitally.
"Systemic stablecoins will need to be backed with high quality and liquid assets," Cunliffe told a conference held by Innovate Finance, a UK fintech industry body.
"These could include either deposits at the Bank of England or very highly liquid securities, or some combination of the two. We are currently considering which of these options is most appropriate," Cunliffe said.
(Reporting by Huw Jones, Editing by Iain Withers)