Bank of England Proposes £20,000 Limit in Landmark Stablecoin Framework

The Bank of England proposed rigorous rules for sterling stablecoins, including allowing up to 60% of reserves in short-term UK debt and setting £20,000 limits per individual, aiming to protect consumers while securely expanding digital money adoption.

Bank of England Proposes Sweeping Rules to Regulate Sterling Stablecoins

The Bank of England moved to strengthen oversight of digital finance as it launched a consultation on Nov. 10 outlining a proposed regulatory framework for sterling-denominated systemic stablecoins. The initiative aims to integrate digital money safely into the U.K. payments landscape and reinforce monetary stability as innovation accelerates.

“This marks a significant step in preparing for a future where new forms of digital money may be widely used for payments alongside existing ones, offering valuable choice for the public,” the British central bank stated. Deputy Governor for Financial Stability Sarah Breeden opined:

Today’s proposals mark a pivotal step towards implementing the UK’s stablecoin regime next year. Our objective remains to support innovation and build trust in this emerging form of money.

The Bank of England explained: “In response to feedback, systemic stablecoin issuers will be permitted to hold up to 60% of backing assets in short-term UK government debt. For the remaining 40%, the Bank will, as previously proposed, provide issuers unremunerated accounts at the Bank of England, ensuring robust redemption and public confidence, even under stress.”

It continued: “Additionally, those issuers considered systemic at launch, or transitioning from the FCA regime, will initially be able to hold up to 95% of backing assets in short-term UK government debt, to support their viability as they grow.”

The Bank also highlighted risk control measures:

To safeguard continued access to credit as the financial system gradually adapts to new forms of digital money, the Bank is proposing temporary holding limits of £20,000 per coin for individuals and £10 million for businesses (with an exemptions regime to allow the largest businesses to hold more if required).

“These limits would be removed once the transition no longer poses risks to the provision of finance to the real economy. These limits would not apply to stablecoins used for settling wholesale financial market transactions in the Bank and FCA’s Digital Securities Sandbox,” the Bank of England clarified. The Financial Conduct Authority (FCA) will continue regulating non-systemic issuers, with joint oversight introduced once issuers are designated as systemic. The consultation closes on Feb. 10, 2026, ahead of final Codes of Practice later in the year.

FAQ ⏰

• What is the Bank of England’s goal with the stablecoin consultation?

The Bank aims to establish a secure framework for integrating systemic stablecoins into the U.K. payments system while maintaining financial stability.

• How much of stablecoin backing assets can be held in government debt?

Systemic issuers may hold up to 60% in short-term U.K. government debt, and up to 95% for those considered systemic at launch.

• What limits are being proposed for stablecoin holdings?

The proposal includes temporary limits of £20,000 per coin for individuals and £10 million for businesses to mitigate transitional risks.

• When does the consultation close?

The consultation period ends on Feb. 10, 2026, with final regulatory codes expected later that year.