The Bank of England on Monday released its final policy statement and draft rules for systemic stablecoins, significantly relaxing several previously proposed regulations. The most notable change is the removal of the originally planned hard cap on individual holdings, replaced by a new issuance-based limit targeting issuers.
Under the new framework, the central bank will impose a temporary issuance limit for each stablecoin, with an initial ceiling set at £40 billion (approximately $52.8 million). This shift moves the regulatory focus from restricting individual exposure to controlling overall supply, providing clearer growth expectations for the stablecoin market.
In addition to the issuance cap, the Bank of England has relaxed requirements for reserve assets. The new draft allows issuers to hold up to 70% of their reserves in short-term UK government bonds, up from the previously proposed 60%. The remainder must be deposited in the central bank's non-interest-bearing accounts. This change gives issuers greater flexibility in asset allocation while maintaining high liquidity and security standards.
The Bank of England said the public consultation period will run until September 22, 2026. The final regulatory framework is expected to be finalized by the end of 2026, with regulated stablecoins scheduled to begin operations in the UK in 2027. This timeline indicates that the UK is pursuing a balance between fostering innovation and ensuring financial stability, offering stablecoin issuers a predictable compliance pathway.