The United Kingdom’s central bank is moving toward stablecoin regulation by publishing a consultation paper proposing a regulatory framework for the asset class.
On Monday, the Bank of England (BoE) released a proposed regulatory regime for sterling-denominated “systemic stablecoins”—tokens that are widely used in payments and therefore potentially pose risks to the UK’s financial stability.
### Proposed Regulatory Measures
Under the BoE’s proposal, stablecoin issuers would be required to back at least 40% of their liabilities with unremunerated deposits at the Bank of England. Additionally, up to 60% of backing could be held in short-term UK government debt.
The consultation paper seeks public feedback on the proposed regime until February 10, 2026. The BoE plans to finalize the regulations in the second half of the year.
### Holding Limits and Backing Requirements
As part of the proposal, the BoE suggested capping individual stablecoin holdings at £20,000 (approximately $26,300) per token. Retail businesses would be subject to a lower limit of £10,000 ($13,200), although exemptions could apply.
“We propose that issuers implement per-coin holding limits of £20,000 for individuals and £10 million for businesses,” the BoE stated. Businesses may qualify for exemptions if higher balances are necessary for normal operations.
### Oversight of Systemically Important Stablecoins
Regarding backing assets, the BoE indicated that issuers considered systemically important could be allowed to hold up to 95% of their backing in UK government debt securities as they scale.
His Majesty’s Treasury will determine which stablecoin payment systems and service providers are deemed systemically important. Once designated, these systems would fall under the proposed regulatory regime and come under the Bank of England’s supervision.
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The Bank of England’s move marks a significant step toward formalizing oversight of stablecoins, aiming to protect the UK’s financial stability while fostering innovation in digital payments.
https://cointelegraph.com/news/bank-of-england-stablecoin-consultation-final-rules-h2-2026