The Bank of England releases draft regulations for stablecoin oversight, with a systemic threshold of £40 billion to be activated next month.

The Bank of England announced its systemic stablecoin policy declaration and draft rules on June 22, setting an issuance cap of £40 billion and requiring that 70% of holdings be interest-bearing assets, in preparation for a full rollout in 2027.
(Background: The Bank of England officially considers stablecoins “new forms of money”! Applications for systemic stablecoins will be opened by the end of the year.)
(Additional context: “Bitcoin is not suitable for payments,” says the Bank of England Governor: Stablecoins and CBDCs will coexist in the future, but global regulation is required.)

Table of Contents

Toggle

• Key regulatory highlights
• End-to-end pipeline with the FCA
• Taiwan’s shadow following the EU

On June 22, the Bank of England officially released its regulatory policy declaration and draft rules for systemic stablecoins. This document lays the foundation for the UK’s first stablecoin regime, allowing stablecoins issued in the UK to operate formally in 2027 in the capacity of “new forms of money.”

Sarah Breeden, Deputy Governor of the Bank of England and Head of Financial Stability, said in the announcement, “This is an important milestone for payment innovation in the UK. We are establishing the basis of trust for new forms of money—including fast redemptions, strong protections, and central bank support. This truly is a world-leading system.”

Key regulatory highlights

This draft reflects feedback from the industry and stakeholders during last year’s consultation. Major revisions include:

• Adjustment to the backing asset cap: The cap on interest-bearing assets (short-term UK government bonds) increases from 60% to 70%, with the remainder held as central bank deposits. This makes the business model for stablecoin issuers more viable, while also preserving sufficient liquidity to meet redemption needs.
• Temporary issuance threshold: Each systemic stablecoin sets an initial issuance cap of £40 billion, replacing last year’s “holding limit” proposal. The threshold will be reviewed periodically and removed after credit supply risks are resolved.
• Scope of non-systemic stablecoins: Non-systemic stablecoins intended for trading cryptocurrencies are supervised only by the Financial Conduct Authority (FCA) and are not subject to central bank rules.

End-to-end pipeline with the FCA

The Bank of England and the FCA are working closely to establish an end-to-end supervisory system covering both non-systemic and systemic stablecoins. The FCA’s final rules will be published in parallel with the central bank’s policy declaration, giving firms a clear transition pathway as they grow.

The draft will be open for public feedback until September 22, 2026. The Bank of England plans to complete practical rules by the end of the year, paving the way for full implementation in 2027.

Taiwan’s shadow following the EU

The UK’s approach stands in contrast to neighboring Asian markets. Korea’s stablecoin regulation is still at the consultation stage, and Japan’s central bank did not propose similar draft rules until the end of 2025. Taiwan currently has no dedicated supervisory framework for stablecoins. Officials from the Financial Supervisory Commission indicated in May this year that the issuance standards for “New Taiwan Dollar stablecoins” are “expected to be proposed by the end of 2026.”

If the UK’s £40 billion threshold becomes a benchmark reference for Asian markets, Taiwan’s homegrown stablecoin regime may directly draw on this structure. In particular, the 70% cap on interest-bearing assets ensures that issuers have room to profit while maintaining liquidity buffers, which is especially crucial under mounting price-inflation pressures.