Key facts
- Bank of England will not implement holding limits on sterling stablecoins.
- A temporary £40 billion issuance cap has been set for systemic stablecoins.
- Stablecoin issuers can hold up to 70% of reserves in interest-bearing government debt.
- The new framework aims to enable unrestricted stablecoin use by households and businesses.
- Final rules are expected by the end of 2026 for a 2027 rollout.
The Bank of England has finalized its regulatory framework for stablecoins, opting against previously considered holding limits for individuals and firms after industry feedback. Instead, a temporary issuance cap of £40 billion has been introduced for systemic stablecoins. The central bank also eased reserve requirements, allowing issuers to hold up to 70% of reserves in interest-bearing government debt, an increase from the prior proposal of 60%. These changes aim to prevent large shifts of deposits from the banking system while permitting broader stablecoin use. The UK is progressing towards a dedicated regulatory framework, with final rules expected by the end of 2026 for a 2027 rollout. Non-systemic stablecoins used for crypto trading will remain under the Financial Conduct Authority's supervision.