The Bank of England has published draft rules for systemic stablecoins, easing reserve requirements and replacing individual holding limits with a temporary £40 billion issuance cap. Systemic stablecoins are those likely to have a significant impact on the financial system, and the central bank aims to bring them under a tailored regulatory framework.
The proposed rules lower the compliance burden for issuers while introducing an aggregate cap to mitigate systemic risk. Unlike previous regulations that imposed per-entity holding limits, the new approach allows more flexibility for market participants, as long as the total issuance remains within the £40 billion threshold.
The draft is now open for public consultation, with final regulations subject to industry feedback. Stablecoin issuers must meet the Bank's prudential standards to operate in the UK. This marks an important step in the UK's digital asset regulatory landscape, providing clearer guidelines for stablecoin adoption.