UK drops stablecoin user limits from its draft regime, with the Bank of England instead proposing a nearly $53 billion cap.
The Bank of England, which acts as the UK’s central bank, has outlined new regulations for issuers whose stablecoin is considered systemic for the payments system of the UK.
Under the new proposal, the British financial regulator Financial Conduct Authority will oversee small stablecoin issuers, but the Bank of England will step in once the stablecoin is deemed systemic and capable of affecting financial stability or confidence in the money.
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Stablecoin issuers could also hold up to 70% of their backing assets in interest-bearing short-term UK government debt, up from the 60% limit proposed in 2025, with the remaining 30% kept in central bank deposits.
The regulator also dropped temporary stablecoin holding limits for households and businesses after industry pushback over earlier proposed caps of £20,000 (~$26,000) for individuals, replacing them with a temporary £40 billion (~$52.8 billion) issuance guardrail for each systemic stablecoin.
New Rules Could Start in 2027
According to Sarah Breeden, who is the Bank of England’s deputy governor for financial stability, the purpose of the draft proposal was to introduce the UK payments market to new payment options and build trust around new money.
She said that it would depend on the speed of redemption and support from the central bank, saying that the regulatory framework would be a “world leading regime.”
The Bank is inviting public comments till Sept. 22 and plans to introduce the final rules by year-end, keeping regulated stablecoins operating in the country from 2027.
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