Why is the Bank of England reconsidering its stablecoin rules?

Bank of England is reviewing proposed stablecoin ownership and reserve limits after crypto firms argued the rules were too restrictive. Regulators now appear open to loosening some requirements to help the UK remain competitive in digital assets.

What stablecoin limits did the Bank of England originally propose?

The Bank of England proposed limiting individuals to holding 20,000 pounds of a UK sterling-based stablecoin per token. Businesses would also have faced a 10 million pound cap under the original framework.

Why did crypto companies oppose the BoE stablecoin rules?

Industry groups said the proposed rules were operationally cumbersome and less competitive than regulations in the United States. Firms argued the restrictions could reduce profitability and discourage stablecoin innovation in the UK.

What is the Bank of England’s 40% reserve requirement?

The BoE proposed requiring at least 40% of stablecoin reserves to remain on deposit at the central bank without earning interest. The remainder would be held in sovereign bonds and other liquid assets.

Why is the 40% reserve rule controversial?

Crypto firms argue the reserve requirement is stricter than comparable US stablecoin rules and would make UK-issued stablecoins less profitable to operate. Lower profitability could reduce incentives for companies to launch sterling-based stablecoins.

What did Sarah Breeden say about the stablecoin proposals?

Sarah Breeden said the Bank of England may have been “overly conservative” in its original thinking. She added that regulators are open to finding alternative ways to manage financial stability risks.

Why is the UK worried about falling behind in stablecoins?

Sterling-based stablecoins currently represent less than 0.5% of the global stablecoin market worth more than $320 billion. Policymakers are concerned the UK could lose ground to jurisdictions like the United States if regulations are too restrictive.

What are stablecoins and why are they important?

Stablecoins are cryptocurrencies pegged to fiat currencies such as the US dollar or British pound. They are widely used for crypto trading, payments and cross-border transfers because they offer lower volatility than assets like Bitcoin.

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BoE rethinks stablecoin limits after industry pushback

Written by Liezl GambePublished May. 15 2026Last Updated May. 15 2026

Bank of England is reconsidering parts of its proposed stablecoin regulatory framework after criticism from digital asset firms that the rules were too restrictive for the industry.

Deputy Governor Sarah Breeden told the Financial Times the central bank was reviewing whether there were “different ways” to manage risks linked to stablecoins as adoption expands.

The Bank of England had previously proposed limiting individual holdings of UK sterling-based stablecoins to 20,000 pounds per token and capping business ownership at 10 million pounds.

“We are genuinely open to thinking whether there are other ways of achieving our objective,”

Breeden said in comments reported by the Financial Times.

The central bank is also reconsidering a proposal requiring at least 40% of stablecoin reserve assets to remain on deposit at the Bank of England without earning interest, a rule industry groups argued would make UK stablecoin businesses less profitable than competitors in the United States.

Breeden said the reserve requirement was originally based on liquidity stress scenarios observed during the 2023 collapse of Silicon Valley Bank but acknowledged regulators may have been “overly conservative” in their approach.

The review comes as the United Kingdom faces pressure to remain competitive in digital assets and stablecoin innovation, with sterling-based stablecoins accounting for less than 0.5% of the global stablecoin market valued at more than $320 billion.