The Bank of England rewrites the rules for stablecoins: abandoning individual limits and adopting a new approach to issuance
The Bank of England has published the final version of its policy and draft rules for systemic stablecoins, making significant adjustments to its proposals from last year. The key change is a complete abandonment of limits on individual ownership. Instead, the regulator is introducing a temporary limit on the total issuance of each systemic stablecoin, set at £40 billion (approximately $52.8 billion).
This decision is a direct response to harsh criticism from the industry. In November 2025, the Bank of England proposed limiting ownership of systemic stablecoins to £20,000 for individuals and £10 million for businesses. Industry associations rightly pointed out that such caps make real-world use cases for stablecoins practically impossible, undermining the very idea of their mass adoption.
From user control to issuer control
The new approach fundamentally changes the logic of regulation. Instead of tracking the balances of each wallet, the regulator sets a direct limit on the issuer. This is a much more efficient and cheaper mechanism, especially in the context of decentralized networks. Users—both individuals and businesses—no longer need to worry about any ownership restrictions. The Bank of England will regularly review the £40 billion threshold and plans to remove it entirely once risks to the lending economy are addressed.
Why exactly £40 billion?
The choice of this amount is not arbitrary. The Bank of England explained that £40 billion is a sufficient volume for 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 the Faster Payments system and card schemes are around £1.4–2.2 billion. At the same time, £40 billion represents about 10% of the average daily volumes processed through the CHAPS system. According to calculations, this is enough to support the cash leg of settlements in the Digital Securities Sandbox without excessive restrictions.
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 increased to 70% from the previously proposed 60%. The remaining 30% must still be held as non-interest-bearing deposits at the central bank. Previously, the rules made the economics of UK stablecoin issuance extremely unattractive compared to competitors in the US and EU, as a significant portion of reserves generated no income. This easing reduces that burden, although part of the reserves 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. Final rules are expected by the end of 2026.
My analysis: This is undoubtedly a positive signal for the market. The abandonment of individual limits is a recognition that the regulator has heard the industry and is ready for dialogue. The temporary issuance limit is a reasonable compromise that will allow the market to develop while maintaining the ability to control it. However, the key question remains: how quickly will the Bank of England be ready to remove this limit, and what specific criteria will be used to assess risks to the lending economy.