The Bank of England just published draft rules for systemic stablecoins, and the approach is notably softer than what was originally proposed last year.
Under the new framework, systemic stablecoin issuers can hold up to 70% of reserves in interest-bearing government debt, up from 60% in the previous proposal. The bank also scrapped individual holding limits, replacing them with a temporary 40 billion pound issuance cap worth about $52.8 billion.
The original proposal would have limited individuals to 20,000 pounds per stablecoin and businesses to 10 million pounds. Industry pushback was fierce, with companies arguing those limits would make UK-issued stablecoins uncompetitive against US dollar-backed rivals.
BoE Deputy Governor Sarah Breeden signaled the shift back in May, saying the bank was reconsidering after feedback from digital asset firms. The new approach aims to achieve the same policy goal, preventing large-scale deposit flight from banks, while allowing unrestricted use by households and businesses.
Coinbase head of policy Katie Harries called the UK the only country capping issuance of stablecoins in its own currency. She raised two concerns: what temporary actually means for the cap, and whether stablecoins can be used for settlement in core wholesale markets.
The BoE is targeting a 2027 rollout, with the rulebook finalized by the end of 2026. Non-systemic stablecoins used mainly for crypto trading will remain under the Financial Conduct Authority supervision.
The message is clear: the UK wants to be a player in stablecoins, but on its own terms.
