The Bank of England has revised its regulation of stablecoins: removal of ownership limits and a new issuance cap.
The Bank of England has published the final policy and draft rules for systemic stablecoins, significantly softening a number of last year's proposals. The key change is the abandonment of individual holding limits for individuals and legal entities. Instead, the regulator introduces a temporary overall issuance limit for each systemic stablecoin, set at £40 billion (approximately $52.8 billion).
New Regulatory Logic: From User Control to Issuer Control
In November 2025, the Bank of England proposed strict limits: £20,000 for individuals and £10 million for businesses. Industry associations sharply criticized these measures, warning that such caps would make real-world use cases for stablecoins practically impossible. The regulator heeded the arguments and completely removed both thresholds.
The new approach—an issuance limit—directly regulates the issuer rather than tracking each user's account. This is much easier to enforce in decentralized networks. According to the Bank of England's estimates, this method provides the same level of control but is cheaper and simpler to implement, and crucially, allows citizens and businesses to use stablecoins without restrictions. The regulator will regularly review this threshold and remove it once risks to the economy's lending capacity are eliminated.
Why Was the £40 Billion Mark Chosen?
The £40 billion limit, according to the regulator's calculations, 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. This amount is also roughly equivalent to 10% of the average daily volumes processed through the CHAPS system. Thus, the limit allows the use of systemic stablecoins for the monetary side of settlements in the Digital Securities Sandbox without excessive restrictions.
Relaxation of Reserve Requirements
The Bank of England has also slightly eased reserve backing requirements. The share of assets that issuers can hold in short-term government debt has been increased to 70% from the previously proposed 60%. The remaining portion must still be held as non-interest-bearing deposits at the central bank. The previous rules made the economics of UK issuance unattractive compared to competitors in the US and EU, as a significant portion of reserves generated no income. The relaxation reduces this burden, although part of the reserves still remains non-yielding.
The Bank of England and the Financial Conduct Authority (FCA) are jointly building a comprehensive regime, including a managed transition for companies from non-systemic to systemic status. Additional details will be published alongside the FCA's final rules. The complete set of rules is expected to be finalized by the end of 2026.
Cryptalist Analysis: The Bank of England's decision is a pragmatic step that places the UK alongside the most progressive jurisdictions in stablecoin regulation. Abandoning personal limits in favor of issuance control is a recognition of the realities of the blockchain industry, where tracking every wallet is technically complex and economically inefficient. However, the temporary nature of the issuance limit and its tie to £40 billion creates a certain ceiling for market growth. The question is how quickly the regulator will be willing to raise or remove it when stablecoins truly begin to be adopted on a large scale in the economy.