The Bank of England changes course: cap on stablecoin holdings removed, £40 billion issuance limit introduced
The Bank of England has published the final policy and draft rules for systemic sterling-denominated stablecoins. The key change is a complete abandonment of the previously proposed strict limits on individual holdings for individuals and legal entities. Instead, the regulator introduces a temporary but more elegant mechanism: a total issuance limit for each systemic stablecoin, set at £40 billion (approximately $52.8 billion).
From Ownership Restrictions to Issuance Control
To recall, in the November 2025 consultation, the Bank of England proposed setting a cap of £20,000 for individuals and £10 million for businesses. Industry associations rightly criticized these measures, pointing out that they render stablecoins useless for real-world scenarios—from daily payments to corporate settlements. The regulator has heeded these arguments. The new approach shifts the focus from controlling each wallet to controlling the issuer. This not only simplifies compliance in decentralized networks but also paves the way for mass adoption of stablecoins without the fear of hitting a ceiling. The Bank of England promises to regularly review the limit and will remove it entirely once risks to the economy's lending are eliminated.
Why £40 Billion?
The figure is not chosen arbitrarily. According to the regulator's estimates, this volume will allow issuers to run a viable business and support a daily transaction volume comparable to other systemic payment systems in the UK, such as Faster Payments (approximately £1.4–2.2 billion per day). For context: £40 billion is roughly 10% of the average daily flows through the CHAPS system. Thus, stablecoins will be able to become a full-fledged participant in settlements, including within the Digital Securities Sandbox, without excessive restrictions.
Relaxation of Reserve Requirements
The Bank of England has also eased reserve requirements. The share of assets that issuers can hold in short-term government bonds has been increased from the previously proposed 60% to 70%. The remaining 30% must still be held as non-interest-bearing deposits at the central bank. This is a step in the right direction: the previous rules made British stablecoin issuance economically uncompetitive compared to US and EU jurisdictions, where a significant portion of reserves generates income. The new conditions reduce this gap, though they do not eliminate it entirely.
The regulator intends to finalize the rules by the end of 2026. Together with the Financial Conduct Authority (FCA), a comprehensive regime is being established, including a managed transition for companies from non-systemic to systemic status. This is a mature and balanced approach that, in my view, creates a solid foundation for the development of stablecoin infrastructure in the UK while maintaining necessary control over systemic risks.