The Bank of England has released a policy statement and draft code of conduct targeting systemic stablecoin issuers, aiming to establish a clear regulatory framework for stablecoins in the UK. The draft sets a firm issuance cap of £40 billion, prohibits issuers from paying any interest to stablecoin holders, and mandates that redemption requests must be fulfilled within 24 hours.
On reserve requirements, the draft stipulates that 70% of reserve assets must be short-term UK government gilts and 30% must be held as deposits with the Bank of England (central bank). This arrangement is designed to ensure high liquidity and safety of stablecoin reserves, thereby reducing systemic risk. The Bank of England stated that the move supports safe innovation, enabling UK-issued stablecoins to develop into a trustworthy form of digital currency.
This draft represents a significant step in the UK's ongoing efforts to refine its digital asset regulatory regime. Currently in the public consultation phase, once formally implemented, it will directly impact stablecoin issuers operating in the UK. Market observers note that the £40 billion cap provides clear room for industry growth, while the strict reserve and redemption requirements help mitigate risks similar to the UST de-pegging event.