Bank of England Releases Policy Blueprint Defining How Systemic Stablecoins Will Operate in the UK - Crypto Economy

TL;DR:

• The Bank of England published preliminary rules for systemic stablecoins and replaces holding limits with a £40 billion issuance cap.
• Issuers will be allowed to hold up to 70% of reserves in interest-bearing public debt, up from the 60% proposed in November 2025.
• The final regulatory framework is expected by end of 2026, with entry into force planned for 2027.

The Bank of England published a policy statement and a set of preliminary rules for systemic stablecoins, defined as those widely used in payments that may pose risks to the United Kingdom’s financial stability. The determination of which stablecoins fall under that regime is left to HM Treasury.

The most significant measure replaces the individual and corporate holding limits proposed in the November 2025 consultation with a temporary issuance cap of £40 billion, equivalent to approximately $52.8 billion. The central bank noted that this safeguard “will be reviewed periodically and removed once the risks to credit provision have been addressed.” In addition, the new framework raises to 70% the proportion of reserves that issuers may hold in interest-bearing public debt, up from the 60% set out in the previous proposal.

The UK Plays for First-Mover Advantage on Stablecoins

Katie Harries, head of policy for Europe at Coinbase, noted that the UK is the only country to impose an issuance cap on stablecoins denominated in its own currency. She raised two outstanding questions: what the “temporary” nature of the cap means in practice, and whether stablecoins will be permitted for use in wholesale market settlement — a condition she considers essential for the country’s tokenization ambitions to materialize.


Mark Fairless, chief executive of ClearBank, acknowledged the progress represented by moving away from holding limits, calling it a positive step toward a more proportionate framework. However, he warned that further progress is still needed to ensure the regime does not undermine sustainable business models, particularly through the requirements on backing assets.

Banks Keep Talking About the “Deposit Problem”

The shift in approach responds to criticism received during the public consultation, in which the industry warned that individual limits of £20,000 per person and £10 million per company could restrict the usability of stablecoins and create operational difficulties for issuers. The central bank had argued at the time that those restrictions were necessary to prevent a mass migration of deposits out of the banking system, which would reduce the availability of credit.

The new regime will apply exclusively to stablecoins classified as systemic. Those used primarily for cryptocurrency transactions will remain under the supervision of the Financial Conduct Authority The final framework is expected by end of 2026, with entry into force planned for 2027.