Bank of England Unveils Draft Rules for Systemic Stablecoins

The Bank of England regulates sterling-denominated systemic stablecoins that could be widely used for payments and affect financial stability. To prevent a rapid outflow of bank deposits and a squeeze on lending to the real economy, it proposed on November 10, 2025, capping holdings of each stablecoin at £20,000 for individuals and £10 million for businesses. The industry argued that the restrictions would hamper payment innovation and market development.

The Bank of England formally withdrew the individual and business holding limits on June 22, 2026. Instead, it proposed a temporary £40 billion issuance cap for each systemic stablecoin and raised the maximum share of reserve assets that may be invested in short-term UK government bonds from 60% to 70%. The draft is open for consultation until September 22 and is expected to be finalized by year-end, allowing regulated stablecoins to operate in the UK from 2027.

The Bank of England has defined stablecoins as a “new form of money” that can be used for payments and settlement. The move signals a policy shift from guarding against crypto-asset risks to establishing rules for issuance, reserves and redemption. It has implications for the sterling payment system and the development of tokenized deposits, while giving banks and fintech companies clearer market direction.

By the end of 2024, the BoE plans to begin accepting regulatory applications for “systemic stablecoins” that could be widely used for payments. The Financial Conduct Authority is also supporting sterling stablecoins that meet standards for reserves, redemption and consumer protection. Digital bank Revolut, which already offers crypto-asset services, could be among the first applicants or issuers.