Bank of England Releases Final Stablecoin Regulatory Framework, Easing Holding Cap Requirements
N.R. Finch
The Bank of England on Monday released its final regulatory framework for systemic stablecoins, scrapping individual holding limits in favour of a £40 billion per-coin issuance cap and raising the interest-bearing reserve allowance to 70% — giving stablecoin issuers a concrete compliance runway in the UK.
What is the biggest change?
The earlier consultation proposed caps on individual holdings. The final version drops that entirely.
Instead, each systemic stablecoin faces a temporary issuance cap set initially at £40 billion.
This means → regulation shifts from "how much any one person can hold" to "how much a single coin can issue" — simpler to enforce, less intrusive for users.
How must reserves be held?
Issuers may allocate up to 70% of backing assets to interest-bearing instruments — short-dated UK government bonds — up from 60% in the consultation.
The remainder sits in Bank of England deposits, ensuring immediate liquidity for redemptions.
In plain terms = issuers get more room to earn yield, but the "redeem on demand" floor stays exactly where it was.
Why is the Bank of England pushing this framework?
The BoE stated explicitly that stablecoins can deliver faster, cheaper, more flexible payment services, including cross-border use and programmable features.
This reflects the UK regulator's core bet: stablecoins are infrastructure to be governed, not risk to be blocked.
The policy statement incorporates feedback from last year's public consultation, aiming to balance monetary resilience with room for innovation.
What is the timeline from here?
Feedback deadline: 22 September 2026.
The BoE plans to finalise the rules by end of 2026.
Regulated stablecoins could begin operating in the UK from 2027.
The BoE and the Financial Conduct Authority (FCA) are building an end-to-end regime together; the FCA will disclose transition details when its own final rules are published.
Content is for reference only, not financial advice.