Bank of England softens planned stablecoin caps

TLDR

The Bank of England is backing away from its toughest planned rules on UK stablecoins after strong industry backlash.

1. Deputy Governor Sarah Breeden says the Bank is reconsidering temporary holding caps of 20,000 per person and 10 million per business, plus strict 40 percent reserve deposits.
2. Easing these caps and reserve rules could make pound stablecoins commercially viable and help London compete with dollar stablecoins, while still keeping a cautious, safety first regime.
3. The key signal will be draft rules expected around June 2026, which will show how far caps are relaxed and how liquidity and redemption safeguards are structured.

Deep Dive

1. Original Caps And Reserves

The BoEs 2025 consultation proposed that individuals could hold only up to 20,000 of any single systemic sterling stablecoin, with businesses capped around 10 million during a transition phase.[](https://www.coindesk.com/policy/2026/05/14/bank-of-england-ready-to-water-down-overly-conservative-stablecoin-proposals-ft)

At the same time, issuers would have to keep at least 40 percent of reserves as non interest bearing deposits at the Bank of England, with most of the rest in short term UK government debt.[](https://decrypt.co/367831/bank-of-england-softens-overly-conservative-stablecoin-plans-amid-industry-pressure)

Breeden has now called these plans overly conservative and said the Bank is genuinely open to alternatives on both the holding caps and the 40 percent floor.[](https://www.coindesk.com/policy/2026/05/14/bank-of-england-ready-to-water-down-overly-conservative-stablecoin-proposals-ft)

2. Impact On Issuers And GBP Liquidity

Industry groups argued the caps are operationally hard to police across wallets and venues, and would block serious corporate use in treasury, payroll, and settlement.[](https://cointelegraph.com/news/boe-signals-softer-uk-stablecoin-regime-after-industry-backlash)

The reserve rule is also expensive. At current gilt yields, a 40 percent non yielding deposit can cost roughly 11.2 million per 1 billion in circulation, versus more generous reserve mixes for USDC and other dollar tokens.[](https://decrypt.co/367831/bank-of-england-softens-overly-conservative-stablecoin-plans-amid-industry-pressure)

Sterling stablecoins are less than 0.5 percent of a roughly 300 billion dollar global stablecoin market, which is dominated by USDT and USDC.? More flexible rules could finally give GBP stablecoins a path to scale.

3. What To Watch Next

Draft BoE rules are expected around June 2026, with further consultation likely before the regime goes live later in the year.[](https://www.coindesk.com/policy/2026/05/14/bank-of-england-ready-to-water-down-overly-conservative-stablecoin-proposals-ft)

Key questions for crypto users and issuers:

1. Do holding caps get scrapped, lifted, or replaced by other safeguards.
2. Does the non interest reserve floor drop, for example from 40 percent toward 20 percent, as some analysts suggest.[](https://decrypt.co/367831/bank-of-england-softens-overly-conservative-stablecoin-plans-amid-industry-pressure)
3. How closely do UK economics line up with EU MiCA and emerging US stablecoin laws.

Confidence: high because multiple major outlets on 14 May 2026 report the same BoE shift.

Conclusion

The BoE is trying to move from a highly restrictive, bank centric stablecoin design to a more workable model that still protects deposits and payment stability.

If it lands nearer to EU and US standards while keeping strong oversight, London could finally support competitive GBP stablecoins rather than pushing volume into offshore or dollar based tokens.