Bank of England eases stablecoin rules, introduces 40-billion-pound issuance cap
The Bank of England published draft rules for systemic pound-backed stablecoins, advancing a UK regulatory framework that it aims to finalize by end-2026 for a planned 2027 launch. Systemic stablecoins are those widely used in payments and deemed by HM Treasury to pose financial stability risks. The BoE softened its earlier proposal after industry feedback: issuers may now hold up to 70% of reserves in interest-bearing government debt, up from 60%, and the previous per-user holding caps were replaced by a temporary £40 billion issuance limit. The Bank said this guardrail will be reviewed and removed once risks to credit provision ease. The regime will apply only to systemic, payments-focused stablecoins; non-systemic tokens mainly used for crypto trading will remain under FCA supervision.
