BoE stablecoin rules now replace individual holding caps with a temporary £40 billion aggregate issuance limit for systemic stablecoins. The Bank of England removed plans to limit personal holdings to £20,000 and business holdings to £10 million per coin. As a result, pound-backed stablecoins can support larger balances, settlement, and collateral use more easily.
The earlier plan would have forced firms to monitor account balances against set limits. That added extra work for brokers, exchanges, and liquidity providers. However, the new issuance cap removes that need and lets users hold and move larger GBP stablecoin sums without tracking individual limits.
BoE Stablecoin Rules Ease Use Cases
The revised framework also broadens potential uses for pound-backed stablecoins. Market participants can now use them more easily for cross-border settlement and as collateral. Sarah Breeden, the BoE’s deputy governor for financial stability, called the move a major step toward greater choice and innovation.
The BoE also changed reserve rules. It cut the share of backing assets held in non-interest-bearing central bank deposits to 30% from 40%. Therefore, issuers can keep more reserves in assets such as short-term gilts, which improves the economics of running a pound-backed stablecoin.
That market remains small. The segment accounts for less than 0.5% of the global stablecoin market, according to the source article.
Industry Questions on Final Framework
Some concerns remain despite the changes to BoE stablecoin rules. Katie Harries, Coinbase’s European policy head, told the FT that two issues still matter. She asked how long the temporary issuance cap will stay in place and whether stablecoins will be allowed for settlement in core wholesale markets.
Without access to those markets, the UK’s tokenisation goals would be harder to achieve, she said. Meanwhile, the BoE kept its stance on bank-issued stablecoins. Banks must still issue them through insolvency-remote entities with separate branding and governance structures.
ClearBank executives have said that rule could make it harder for traditional banks to take part. In contrast, non-bank issuers and fintechs may have more room to act in the near term. Independent issuers can move ahead under rules that require 24-hour redemption and statutory trust arrangements, and the BoE aims to finalise the framework by the end of 2026.
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