The Bank of England (BOE) has outlined its proposed regulatory regime for stablecoins, confirming its intention to impose limits on holdings per coin.
The UK’s central bank said on Monday it was proposing “temporary” limits of 20,000 pounds ($26,300) per coin for individuals and 10 million pounds for businesses.
The BOE added that these limits would be removed once the financial system transitioned to incorporating stablecoins, digital tokens tied to the value of a traditional financial asset (TradFi) such as a fiat currency.
As previously noted, according to the consultation document, the BOE could also exempt businesses that must hold large balances, such as cryptocurrency exchanges and even supermarkets.
The BOE’s plans to introduce holding limits were criticized by some cryptocurrency groups, who called them unworkable, when they were first reported in September.
Industry groups have warned that the UK would have stricter rules than jurisdictions like the US or the European Union (EU), which could make it a less attractive market in which to do business.
Sarah Breeden, the BoE’s deputy governor for financial stability, said recently that the limits were necessary to reduce the risk of destabilizing the commercial banking sector, which most people rely on for their mortgages.
“These proposed measures, while harsh on their face, will benefit systemic stablecoins in the medium to long term to become a reliable method of exchanging value and a real alternative to current forms of digital currency,” Etay Katz, head of digital assets at law firm Ashurst, said in an emailed comment.
Bank of England Stablecoin Support Proposals
The BOE has also proposed that stablecoin issuers be able to hold up to 60% of their collateral assets in short-term UK government debt, with the remaining 40% provided via non-interest-bearing Bank of England accounts.
An exception to this framework, however, is the transition of stablecoin issuers to a systemic system, which could hold 95% of their collateral assets in the form of short-term debt to support their initial growth.
The central bank stressed that the proposed framework only applies to “systemic sterling-denominated stablecoins” – digital tokens linked to the UK currency that can be used for retail payments and wholesale settlement. Stablecoins used for non-systemic purposes, such as trading cryptoassets, would be regulated by the Financial Conduct Authority (FCA), the BOE said.
The BOE’s proposals are now open for consultation until February 10, 2026, after which it will finalize its rules, setting out detailed requirements for stablecoin issuers, later in 2026.
