The Bank of England has revised its stablecoin regulation: abandoning ownership limits and introducing an issuance cap.
The Bank of England has published the final policy and draft rules for systemic stablecoins, making significant adjustments to its November proposals. The key change is a complete abandonment of restrictions on individual ownership of digital assets. Instead, the regulator is introducing a temporary limit on the total issuance volume for each systemic stablecoin, setting an initial threshold of £40 billion (approximately $52.8 billion).
To recall, in the November 2025 consultation document, the Bank of England proposed limiting individual ownership of systemic stablecoins to £20,000 and business ownership to £10 million. Industry associations heavily criticized these measures, rightly pointing out that such caps make real-world stablecoin use cases practically impossible. The regulator listened to the market.
The new approach — an issuance limit — is far more elegant and practical. It directly regulates the issuer rather than tracking each user's account, which is especially important for decentralized networks. As Deputy Governor for Financial Stability Sarah Breeden stated, this is an important milestone for developing choice and innovation in UK payments. According to the Bank of England's own estimates, this method provides the same level of control as the previous proposals but is cheaper and, most importantly, allows citizens and businesses to use stablecoins without restrictions.
Why exactly £40 billion?
The choice of this figure is not random. The Bank of England explained that £40 billion is a volume that will allow issuers to run a viable business and support a daily transaction volume comparable to other systemic payment systems in the UK. For comparison, the average daily figures for Faster Payments and card schemes are around £1.4–2.2 billion, while £40 billion is roughly 10% of the average daily volumes of the CHAPS system. Thus, the regulator is building in sufficient safety margin for market development without creating excessive risks to financial stability. This limit is intended as a temporary measure that will be reviewed and eventually removed as experience and understanding of stablecoins' impact on the economy accumulate.
Easing of reserve requirements
In addition to abandoning individual limits, the Bank of England has slightly relaxed reserve requirements. The share of assets that issuers can hold in short-term government debt has been raised from 60% to 70%. The remaining portion must still be held as non-interest-bearing deposits at the central bank. This is a small but important concession: the previous rules made the economics of UK issuance uncompetitive compared to the US and EU, as a significant share of reserves generated no income. The new approach reduces this burden, although part of the reserves still remains unpaid.
Expert opinion: The Bank of England's decision is a pragmatic and balanced step that signals the regulator's maturity. Abandoning complex and unworkable ownership limits in favor of a simple and effective issuance cap is a victory for common sense and a signal to the market: the UK intends to become a global hub for innovation in digital payments without sacrificing financial stability. Final rules are expected by the end of 2026, and this process will be conducted jointly with the Financial Conduct Authority (FCA), promising the creation of a coherent and predictable regime.