Bank of England Deputy Governor Sarah Breeden has cautioned that relaxing stablecoin regulations could pose significant risks to the financial system. Breeden highlighted that insufficient oversight of stablecoins, which are becoming more intertwined with traditional banking, could lead to financial instability and potentially trigger a credit crisis. To address these concerns, the Bank of England has implemented holding limits on stablecoins, restricting individual holdings to £10,000 and business holdings to £10 million. These measures aim to mitigate risks and maintain financial stability during potential crises.