The Bank of England released its long-awaited policy statement and draft implementation rules for systemic stablecoin issuers on June 22. The new regulatory framework eliminates prior proposals that limited individual holdings of stablecoins. Instead, a temporary overall issuance cap of 40 billion pounds has been set for each stablecoin. In addition, the central bank raised the proportion of interest-bearing collateral assets that issuers must hold from 60 percent to 70 percent.
The focus shifts from individual wallets to total issuance
During the consultation process in November 2025, the Bank of England had proposed limits of 20,000 pounds per person and 10 million pounds per business. With the latest regulation, both these individual caps have now been abolished. This shift turns the focus of oversight away from monitoring users’ wallets and towards the aggregate amount in circulation by each issuer.
This change is expected to simplify regulation from a technical perspective. The previous scheme would have required regulators to keep track of scattered individual wallets across different platforms. The UK Cryptoasset Business Council, a key industry association, had warned that such a system would be costly and overly complex.
Coinbase’s Head of European Policy welcomed the new framework but highlighted two areas of uncertainty: the meaning of the word “temporary” in the new issuance cap and whether stablecoins will be allowed for settlements in core wholesale markets.
New collateral structure ratios introduced
Under the revised policy, stablecoin issuers can now hold up to 70 percent of their reserves in short term, interest-bearing UK government securities. The remaining 30 percent must be parked as deposits at the central bank. According to the Bank of England, this structure aims to safeguard repayment capacity during periods of market stress.
Regulators argue that this new 30 to 70 arrangement could enhance the economic sustainability of stablecoin issuers. In the bank’s view, it narrows profitability gaps compared to stablecoins regulated in the US under the GENIUS Act or in Europe under the MiCA framework.
Earlier approach deemed overly cautious
Bank of England Deputy Governor Sarah Breeden acknowledged in May that the initial proposals may have been excessively cautious. Breeden stated that abandoning the individual holding limits was intended to produce the same policy outcome with lower costs and greater ease of implementation.
Coinbase CEO Brian Armstrong had also argued earlier this year that the proposed holding limits risked undermining the UK’s global competitiveness in the digital economy. In June, the Financial Services Regulation Committee in the House of Lords echoed this stance, calling both for the removal of holding limits and a review of zero-yield reserve requirements.
Market size and timing in focus
The committee pointed out that it was premature to impose sweeping restrictions on a market that remains relatively small. According to data from CoinGecko, the pound-based stablecoins account for less than 0.5 percent of the $315 billion global stablecoin market.
Currently, companies such as Revolut, Monee Financial Technologies, ReStabilise, and VVTX are testing their stablecoin products in the Financial Conduct Authority’s regulatory sandbox. These firms aim to offer solutions for retail payments, wholesale settlement, and crypto asset transactions. The Bank of England has opened a feedback window until September 22, 2026. Final rules are expected by year-end, with the regulated stablecoin regime targeted to launch in 2027.
