Key Highlights

  • The Bank of England scrapped per-user holding limits and replaced them with a £40 billion total issuance cap per systemic sterling stablecoin issuer.

  • Systemic issuers must back tokens 100%, split between short-dated UK gilts (70%) and Bank of England deposits (30%).

  • Consultation closes September 22, 2026; final rules are targeted for end of 2026 with the full regime launching in 2027.

The Bank of England has overhauled its proposed approach to sterling stablecoin regulation, ditching earlier caps on how much individuals and businesses could hold and shifting instead to a ceiling on total supply. Under the revised framework, any stablecoin issuer deemed systemic will be limited to £40 billion worth of sterling-backed tokens in circulation at any one time.

The earlier draft had proposed a £20,000 limit per individual wallet and £10 million for businesses. After industry feedback flagged the limits as unworkable, the BoE moved to a supply-side constraint instead. Central bank officials said targeting total issuance gives them cleaner macroprudential controls without restricting legitimate everyday use.

Reserve requirements remain stringent. Systemic issuers must maintain 100% backing, allocated as 70% in short-dated UK government bonds and 30% in deposits held directly at the Bank of England. The split is designed to keep stablecoin assets liquid and away from riskier instruments while preserving some role for the gilt market.

The consultation paper, published June 22, accepts responses until September 22. The BoE aims to finalize its rules by the end of 2026, with the full regime going live in 2027. The Financial Conduct Authority is running a parallel consultation on the payments and conduct side, meaning stablecoin issuers will need to satisfy both regulators before operating at scale in the UK market. The framework mirrors elements seen in other major jurisdictions moving to cap systemic stablecoin exposure, though the BoE's reserve split goes further than most in locking assets into central bank deposits.