Bank of England eases stablecoin rules

TLDR

The Bank of England has relaxed its planned rules for pound-backed stablecoins by scrapping wallet caps and allowing more flexible reserves under a temporary issuance ceiling.

1. The Bank dropped per-user limits on sterling stablecoins and replaced them with a 40 billion issuance guardrail per systemic coin, plus looser reserve rules for issuers.
2. Issuers and users gain unlimited wallet sizes and better economics, but UK pound stablecoins remain capped and relatively conservative compared to US and EU regimes.
3. A consultation runs into late 2026, with the final code due by year end and live UK-regulated stablecoins expected from 2027, making this a medium term structure story.

Deep Dive

1. What Actually Changed

In its June 2026 policy statement, the Bank of England removed proposed caps that would have limited individuals to 20,000 and businesses to 10 million per sterling stablecoin, after industry pushback that the limits were unworkable and anti-competitive. Instead, it now proposes a temporary 40 billion issuance cap per systemic pound stablecoin, letting users and firms hold unlimited amounts while constraining the total size of each token in the UK system-wide framework.[](https://finance.yahoo.com/markets/crypto/articles/bank-england-eases-stablecoin-rules-133517320.html)

Reserve rules were eased as well. Issuers of systemic pound stablecoins may now hold up to 70 percent of backing assets in short term UK government debt, up from 60 percent in earlier drafts, with the remaining 30 percent in non interest bearing Bank of England deposits.[]() For some new issuers, the gilts share can be even higher during the scale up phase.[](https://news.bitcoin.com/bank-of-england-drops-stablecoin-user-caps-and-sets-53-billion-issuance-limit/)

The policy is framed as final in direction, but the draft Code of Practice remains open for feedback until 22 September 2026, with a target to finalize rules by the end of 2026 and enable regulated pound stablecoins from 2027.?

2. Impact On Issuers And Users

For issuers, the shift from wallet caps to an issuance ceiling plus higher gilt allocation makes a UK pound stablecoin more commercially viable. More of the reserve can now earn yield, while the 30 percent central bank deposit slice preserves liquidity for redemptions.[]() That is a clearer path to sustainable business models than the original, more restrictive design.

For users and payment firms, unlimited holdings remove a hard barrier to using pound stablecoins for payroll, treasury and high value settlement. The tradeoff is that any single regulated pound token cannot grow beyond roughly $53 billion at current levels, which is well below leading dollar stablecoins.? Industry groups welcome the easing but still describe the UK framework as cautious and warn that the 30 percent zero yield deposits plus the hard cap might keep sterling tokens less competitive than dollar and euro alternatives.[](https://finance.yahoo.com/markets/crypto/articles/bank-england-eases-stablecoin-rules-133517320.html)

3. What To Watch Next

The new regime applies to systemic payment stablecoins, with the Bank of England overseeing systemic payment risk and the Financial Conduct Authority supervising non systemic tokens and trading venues.? HM Treasury will decide which coins qualify as systemic, a key gate for any serious GBP stablecoin issuer.

Key open questions for crypto users and builders include how long the 40 billion cap stays in place, whether pound stablecoins will be allowed in core wholesale settlement rails, and which firms (exchanges, fintechs, neobanks) move fastest to launch regulated GBP tokens.[](https://finance.yahoo.com/markets/crypto/articles/bank-england-eases-stablecoin-rules-133517320.html) Today, pound tokens are less than 0.5 percent of the global stablecoin market, so there is room to grow if this framework proves attractive.?

Conclusion

The Bank of Englands revised framework makes pound stablecoins more practical by scrapping wallet caps and improving issuer economics, while still tightly managing systemic risk through a hard issuance ceiling and conservative reserves. For crypto users, the main opportunity is a clearer path to regulated GBP rails in the UK from 2027, but real competitiveness against dominant dollar stablecoins will depend on how the issuance cap and reserve constraints evolve over time.