The Bank of England has revised one of the most controversial parts of its stablecoin proposals, replacing individual holding limits with a single aggregate issuance cap.
This change removes a major hurdle to using GBP-backed stablecoins for larger balances, settlements and collateral.
The revised proposal drops plans to cap individual property at £20,000 and business property at £10 million each. Instead, the Bank of England will implement a temporary cap on the total issuance of £40 billion for systemic stablecoins.
Industry concerns have not gone away. Head of European Policy at Coinbase Katie Harries He said The Financial Times reported that two questions remain: how long the “temporary” cap on single coin issuance will last, and whether stablecoins will be allowed to settle on primary wholesale markets. She said that without the second point, it would be difficult to achieve the UK’s coding ambitions.
A simpler framework for market participants
the Original borders This would have required firms to track individual account balances against maximum holding limits, adding operational complexity for brokers, exchanges and liquidity providers.
The maximum release level removes this condition. Market participants can hold and transfer larger balances of stablecoins in GBP without tracking individual account limits. This change also makes a wider range of use cases more practical, including cross-border settlement and the use of stablecoins as collateral.
“This is a major milestone in delivering greater choice and innovation,” said Sarah Breeden, the Bank of England’s Deputy Governor for Financial Stability.
Improving the economy for exporters
The previous proposal reflects the Bank of England’s concern that stablecoins could accelerate deposit outflows in the event of a banking stress. However, the regulator has been modified Reserve requirements.
The share of supporting assets required to be kept in non-interest bearing central bank deposits was also reduced from 40% to 30%. This leaves a larger portion of reserves available for assets such as short-term bonds.
For exporters, this change improves the economics of operating a stablecoin backed by the pound. This sector currently represents less than 0.5% of the global stablecoin market.
The approach adopted by the United Kingdom falls between emerging frameworks in the United States and the European Union. Washington encourages the growth of dollar-denominated payment stablecoins through… The law of genius.
European Union Mica system It focuses more on reserve quality, liquidity and supervision of large issuers. The Bank of England’s framework reflects a different concern: to support innovation without increasing risks to a banking system that remains heavily dependent on deposits.
Banks still face structural hurdles
The Bank of England has not changed its position on stablecoins issued by banks. The banks that wish to issue it stablecoins It has yet to do so through insolvent entities with separate branding and governance structures.
ClearBank executives have argued that this requirement could make participation difficult for traditional banks. This rule may leave non-bank issuers and fintech companies with greater flexibility in the near term.
While banks evaluate the operational and legal implications, independent issuers can proceed within a framework requiring 24-hour recovery and legal trust arrangements. The Bank of England is targeting final rules by the end of 2026.
The Bank of England has revised one of the most controversial parts of its stablecoin proposals, replacing individual holding limits with a single aggregate issuance cap.
This change removes a major hurdle to using GBP-backed stablecoins for larger balances, settlements and collateral.
The revised proposal drops plans to cap individual property at £20,000 and business property at £10 million each. Instead, the Bank of England will implement a temporary cap on the total issuance of £40 billion for systemic stablecoins.
Industry concerns have not gone away. Head of European Policy at Coinbase Katie Harries He said The Financial Times reported that two questions remain: how long the “temporary” cap on single coin issuance will last, and whether stablecoins will be allowed to settle on primary wholesale markets. She said that without the second point, it would be difficult to achieve the UK’s coding ambitions.
A simpler framework for market participants
the Original borders This would have required firms to track individual account balances against maximum holding limits, adding operational complexity for brokers, exchanges and liquidity providers.
The maximum release level removes this condition. Market participants can hold and transfer larger balances of stablecoins in GBP without tracking individual account limits. This change also makes a wider range of use cases more practical, including cross-border settlement and the use of stablecoins as collateral.
“This is a major milestone in delivering greater choice and innovation,” said Sarah Breeden, the Bank of England’s Deputy Governor for Financial Stability.
Improving the economy for exporters
The previous proposal reflects the Bank of England’s concern that stablecoins could accelerate deposit outflows in the event of a banking stress. However, the regulator has been modified Reserve requirements.
The share of supporting assets required to be kept in non-interest bearing central bank deposits was also reduced from 40% to 30%. This leaves a larger portion of reserves available for assets such as short-term bonds.
For exporters, this change improves the economics of operating a stablecoin backed by the pound. This sector currently represents less than 0.5% of the global stablecoin market.
The approach adopted by the United Kingdom falls between emerging frameworks in the United States and the European Union. Washington encourages the growth of dollar-denominated payment stablecoins through… The law of genius.
European Union Mica system It focuses more on reserve quality, liquidity and supervision of large issuers. The Bank of England’s framework reflects a different concern: to support innovation without increasing risks to a banking system that remains heavily dependent on deposits.
Banks still face structural hurdles
The Bank of England has not changed its position on stablecoins issued by banks. The banks you wish to issue stablecoins It has yet to do so through insolvent entities with separate branding and governance structures.
ClearBank executives have argued that this requirement could make participation difficult for traditional banks. This rule may leave non-bank issuers and fintech companies with greater flexibility in the near term.
While banks evaluate the operational and legal implications, independent issuers can proceed within a framework requiring 24-hour recovery and legal trust arrangements. The Bank of England is targeting final rules by the end of 2026.
