The Bank of England has published a policy statement and draft code of conduct for systemic stablecoin issuers, aiming to support safe innovation and enable stablecoins issued in the UK to develop into trusted digital currencies through a clear regulatory framework.
The draft rules set a strict issuance cap of £40 billion and prohibit stablecoin issuers from paying interest to holders. Reserve assets must consist of 70% short-term UK government bonds and 30% deposits at the Bank of England. Additionally, issuers are required to fulfill redemption requests within 24 hours.
This regulatory proposal marks a significant step forward in the UK's approach to stablecoin oversight, reflecting the central bank's effort to balance financial innovation with monetary stability. Market participants will have the opportunity to provide feedback during the consultation period.