The Bank of England has announced that systemically important stablecoin issuers will be permitted to hold a portion of their reserves in high-quality, liquid assets, including short-term government bonds. This marks a shift from the previous framework, which allowed stablecoin issuers to hold reserves at the central bank but without earning interest, a model seen as unattractive to major issuers. Deputy Governor Sarah Breeden highlighted this change in a recent speech, noting the evolving role of stablecoins in the financial ecosystem. Breeden also revealed that the use of stablecoins and tokenized deposits will extend beyond retail applications to include the settlement of tokenized securities within the UK Digital Securities Sandbox. This expansion reflects a broader integration of digital assets into the financial system, as stablecoins were not initially part of the sandbox's scope.