Bank of England proposes new changes to stablecoins
Bitcoin rebounded from the $100,000 support level and is currently trading at $106,200, following reports that the U.S. Senate has made significant progress in ending the shutdown, which is now in its 40th day and the longest in U.S. history. The Cryptocurrency Fear and Greed Index, a gauge of cryptocurrency investor sentiment, also rose over the weekend after reaching its lowest level since early April.
While the Senate has passed the bill, the House of Representatives has not yet voted on the final text. However, if the bill is quickly approved by the House and signed into law, many government services would resume, reducing risk and uncertainty in the market and returning liquidity to the economy as hundreds of thousands of federal workers receive their back pay. Depending on the pace at which the shutdown ends, CPI and PPI inflation data could also be released this week, which could further bolster investor optimism and contribute to higher prices.
Markets were recently shaken by the CEO's hawkish comments FED, Powell said that an interest rate cut at the December meeting is not a foregone conclusion. However, a lower-than-expected inflation reading could swing the Fed's decision pendulum in the opposite direction.
The biggest increases
$ICP was one of the biggest gainers last week, gaining 90%, thanks to the launch of the new Caffeine AI platform by the DFINITY foundation (the main backer of the Internet Computer blockchain). The platform enables the creation of decentralized applications without coding and could attract more potential developers to the ICP ecosystem.
$ZEC continues its rally, temporarily reaching $750, its highest price since January 2018, as the privacy cryptocurrency recovery continues and investors speculate on further price increases.
Bank of England publishes consultation paper on regulatory regime for stablecoins
Bank of England published today consultation document outlining proposed regulatory solutions for systemic stablecoins denominated in sterling, which could in the future be used for retail payments and wholesale settlements. Issuers of systemic stablecoins will be allowed to hold up to 60% of their reserve assets in short-term UK government bonds. The Bank of England will hold the remaining 40% in non-interest-bearing accounts, ensuring a robust redemption mechanism and public confidence, even in stressful situations.
The Bank of England's regulations do not cover stablecoins used for non-systemic purposes, such as buying and selling cryptocurrencies. These will be overseen by the Financial Conduct Authority, according to a BoE press release. The consultation period runs until February 10, 2026. Following the consultation, the Bank of England will hold further discussions. The Bank is scheduled to finalize its Code of Conduct in 2026, setting out detailed requirements for systemic stablecoins.