British pound stablecoins capped to $53B ceiling as Bank of England sets out stablecoin rules
The Bank of England has made sterling stablecoins more practical by dropping proposed wallet-level holding limits for individuals and businesses. It also loosened reserve rules, allowing up to 70% of backing assets in interest-bearing short-term UK government debt, with 30% held in central bank deposits. But it replaced user caps with a temporary £40 billion issuance limit for each systemic pound stablecoin, so growth is still constrained at the product level. The new framework is meant to support regulated pound tokens from 2027 while limiting risks to bank deposits and credit provision. The Bank says the cap is temporary and may be reviewed or removed later. It also acknowledges a new risk: if demand exceeds supply, a token could trade above par in secondary markets. Overall, the UK has made sterling stablecoins easier to use for payments, but not yet free to scale to the size of major dollar stablecoins like USDT or USDC.
