TLDR
- BOE rules would require UK stablecoin issuers to hold 30% of reserves at the central bank.
- Personal holding caps were removed and replaced with a £40 billion total issuance limit per stablecoin.
- Final rules are expected by end of 2026, allowing regulated stablecoins from early 2027.
- The framework shifts risk controls from individual users to stablecoins reaching large market scale.
- UK regulators are also developing crypto custody, staking, tokenization and retail access rules together.
The Bank of England has published its final stablecoin policy and draft rules, setting a path for regulated UK stablecoins from 2027. The framework requires issuers to keep 30% of their backing reserves at the central bank. Final rules are expected by the end of 2026.
The latest framework marks a softer approach than the earlier consultation presented to the industry last year. Personal holding caps have been removed, while a £40 billion total issuance limit has been introduced for each stablecoin. The cap is designed to manage risk when a token reaches broader financial scale.
The change moves the BOE’s approach away from restricting how much each user can hold. Instead, the central bank is focusing on aggregate issuance that could affect financial stability. This structure allows users and institutions to participate without personal balance limits.
Reserve rules and issuance limits adjusted
The BOE also relaxed parts of its reserve asset requirements compared with earlier proposals. Industry participants had argued that strict reserve terms could make UK issuance less competitive than offshore alternatives. The new structure still keeps a direct central bank reserve requirement through the 30% rule.
The removal of personal holding caps responds to concerns raised by crypto firms and payment companies. Institutional users had warned that individual limits could be difficult to apply in larger transactions. The £40 billion threshold gives regulators a market-wide tool rather than a user-level control.
The central bank had already signaled in May that it was reconsidering its approach after industry feedback. The final framework reflects a balance between market access and financial stability oversight. Stablecoin issuers will still need to operate within a regulated system before services can go live.
UK framework enters global race
The UK’s revised stablecoin policy arrives as major jurisdictions are expanding digital asset regulation. The United States passed stablecoin legislation this year with the stated goal of supporting dollar-backed token markets. Japan is also moving crypto assets under its Financial Instruments and Exchange Act.
The UK is building rules across several parts of the digital asset market at the same time. The Financial Conduct Authority and the BOE have been consulting on custody, staking and stablecoin regulation. The FCA also made rules for tokenized funds in April.
Earlier this month, the FCA proposed allowing retail funds to hold up to 10% in crypto exchange-traded notes. These measures show that the UK is seeking a broader regulatory structure for institutional and retail crypto access. The stablecoin rules form one part of that wider policy direction.
Final publication by the end of 2026 would allow the framework to become active in early 2027. Market participants will watch whether issuers can meet the 30% central bank reserve requirement while remaining commercially viable. The draft rules provide the clearest route so far for regulated UK stablecoin issuance.
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