What did the Bank of England change about its stablecoin rules?

The Bank of England scrapped its earlier proposal of individual holding limits — £20,000 for individuals and £10 million for businesses — replacing them with a temporary £40 billion aggregate issuance cap per systemic stablecoin issuer. The reserve requirement was also relaxed, allowing up to 70% of backing assets in short-term government debt, with the rest held as non-interest-bearing central bank deposits.

Why were the original Bank of England stablecoin rules criticised by the industry?

The original framework set wallet-level limits of £20,000 per individual and £10 million per business, which industry groups argued would make sterling stablecoins impractical at scale. Firms building payment infrastructure need high-volume transaction capability, and those caps would have blocked meaningful commercial adoption from the outset.

What does the £40 billion issuer cap actually mean for stablecoin operators?

The £40 billion cap limits how much of a single stablecoin can be in circulation at any one time, applied at the issuer level rather than the wallet level. This gives banks, payment firms, and crypto companies a cleaner planning framework — though it is still a ceiling that could constrain growth if sterling stablecoin demand scales quickly.

How does the revised reserve requirement affect stablecoin issuers' business model?

Stablecoin issuers typically need yield on backing assets to cover operational costs and remain commercially viable. The new rules allow up to 70% in short-term government debt — which generates some return — while the remaining 30% sits as non-interest-bearing deposits at the Bank of England, balancing issuer economics against redemption liquidity.

Is the UK stablecoin market open for business now following this announcement?

Not yet. Final rules still need to be published before any regulated sterling stablecoin operations can begin. This announcement signals a policy direction shift, but firms cannot launch regulated sterling stablecoin products under the new framework until the full rulebook is finalised.

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Bank of England eases stablecoin rules sets £40B cap

Written by Heidi Cuthbert Published Jun 22, 2026, 10:16 AM

The Bank of England has revised its proposed framework for systemic sterling stablecoins, scrapping individual holding limits in favour of an aggregate issuance cap per systemic issuer.
The earlier proposal had drawn significant industry criticism, as it included limits of £20,000 for individuals and £10 million for businesses — restrictions that many argued would prevent sterling stablecoins from functioning at any meaningful scale.
The central bank has now adopted a simpler model centred on a temporary £40 billion issuance cap applied to each individual stablecoin, according to Reuters.

The Bank has also relaxed its proposed reserve requirements, permitting issuers to hold up to 70% of backing assets in short-term government debt, with the remainder held as non-interest-bearing deposits at the central bank.

The stablecoin market remains heavily dominated by dollar-denominated tokens, yet the UK has been working to establish itself as a credible jurisdiction for digital payments, tokenisation, and market infrastructure.

A functioning sterling stablecoin framework would provide regulated firms with clearer guidelines for issuing payment tokens suitable for real settlement activity.

The shift from wallet-level limits to an issuer-level cap is seen as a more workable structure for banks, payment companies, and crypto firms planning product development.

The revised reserve split is designed to balance yield viability for issuers against the liquidity requirements needed to manage redemption risk.

Final rules are still expected before any regulated operations can begin, meaning the UK stablecoin market is not immediately open for business under the new framework.

The UK has faced mounting pressure to keep pace with regulatory developments in the United States and European Union, and a more flexible systemic stablecoin regime could attract firms building tokenised payment infrastructure.

Sterling stablecoins remain a fraction of the size of their dollar-backed counterparts, but greater regulatory clarity may encourage banks and payment firms to develop products that were previously difficult to justify under stricter holding-limit rules.

Bank of England eases stablecoin rules sets £40B cap

Frequently asked questions

Bank of England eases stablecoin rules sets £40B cap

Frequently asked questions