The Bank of England has softened its proposed regulatory framework for sterling-denominated stablecoins, dropping earlier plans for individual and corporate holding limits. Instead, the central bank introduced a £40 billion ($52.8 billion) cap on total issuance per stablecoin, as outlined in a policy statement and draft rules released on June 22.
Key Changes to the Stablecoin Regime
The BoE scrapped previously proposed temporary holding caps of £20,000 per individual and £10 million for businesses, which had drawn heavy criticism from crypto industry participants and lawmakers. In a notable shift, the central bank also eased requirements for backing assets: stablecoin issuers can now hold up to 70% of reserves in short-term UK government debt (gilts), up from the earlier 60% recommendation, with the remaining 30% held as deposits at the BoE.
“This is a major milestone in delivering greater choice and innovation in UK payments. Innovation thrives on trust. And today we’ve set out the foundations of that trust for a new form of money – with prompt redemption, strong protections and central bank support,” said Sarah Breeden, Deputy Governor for Financial Stability.
Implementation Timeline and Next Steps
The Bank of England set the £40 billion issuance guardrail as a temporary measure, which it expects to lift or increase after a review ensures risks to credit provision are managed. The central bank will seek feedback and finalize the rules by the end of 2026, working alongside the Financial Conduct Authority. Regulated stablecoins could begin operating in the UK from 2027.