The Bank of England has published a consultation paper (CP) setting out its proposed regulatory regime for sterling-denominated systemic stablecoins, including a cap on holdings for individuals and businesses.
Under the proposals, systemic stablecoin issuers will be permitted to hold up to 60% of backing assets in short-term UK government debt. For the remaining 40%, issuers will be permitted to access unremunerated accounts to ensure robust redemption and public confidence, even under stress
Additionally, those issuers considered systemic at launch, or transitioning from the FCA regime - which will cover the buying and selling of cryptocurrencies via stablecoins - 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 central bank is also considering the introcution of a liquiditty backstop should systemic issuers be unable to monetise their backing assets in private markets.
In a move which has already sparked controversy in the sector, the Bank is proposing temporary holding limits of £20,000 per coin for individuals and £10 million for businesses.
This idea has drawn fire from crypto enthusiasts, arguing that the imposition of a cap would stifle growth and the UK’s competitiveness in a digital economy that’s already becoming heavily dollarized.
The Bank says the provision of limits on holdings follows a new analytical approach that it has adopted to quantify the risks from potentially significant and rapid outflows of bank deposits into new forms of digital money.
It says the limits would be removed once the transition no longer poses risks to the provision of finance to the real economy. Additionally, these limits would not apply to stablecoins used for settling wholesale financial market transactions in the Bank and FCA’s Digital Securities Sandbox.
Sarah Breeden, deputy governor for Financial Stability, says: “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. We’ve listened carefully to feedback and amended our proposals for achieving this, including on how stablecoin issuers interact with the Bank of England. These proposals are fit for a future where stablecoins play a meaningful role in payments, giving the industry the clarity it needs to plan with confidence.”
The consultation is open until 10 February 2026.