BoE shelves stablecoin holding caps, sets £40B issuance limit

The Bank of England published its final policy statement and draft Code of Practice for systemic stablecoin issuers on June 22, scrapping the individual holding caps that had drawn criticism from the crypto industry and lawmakers alike.

The November 2025 consultation had proposed capping sterling stablecoin ownership at £20,000 per person and £10 million per business. Both provisions are gone. In their place, the BoE will apply a temporary "issuance guardrail" set at £40 billion per stablecoin. The change means a single issuer cannot circulate more than that amount, rather than policing individual wallet addresses.

Simon Jennings, the executive director of the UK Cryptoasset Business Council, had called the monitoring requirement a "costly, complex new system" in May. The BoE has now sidestepped that infrastructure entirely.

The regulator also raised the permitted share of interest-bearing backing assets – specifically short-term UK government debt – from 60% to 70%. The remaining 30% must sit as central bank deposits. The BoE said the revised 30:70 split improves issuer economics, narrowing the profitability gap with US firms operating under the GENIUS Act and European issuers under MiCA.

Coinbase's Head of Policy for Europe welcomed the framework but pointed to two unresolved gaps in a statement to Cryptopolitan: what "temporary" means for the per-coin cap – "the UK is the only country capping issuance of stablecoins in its own currency" – and whether stablecoins can be used for settlement in wholesale markets, "without which the UK's tokenisation ambitions will not be delivered."

The BoE is accepting feedback until September 22, 2026, with final rules expected before the end of that year. The regulator targets a live regime for regulated stablecoins by 2027.

Deputy Governor Sarah Breeden admitted in May that the original proposals may have been "overly conservative." She said the holding-limit model was being abandoned entirely, framing the move as delivering "the same policy outcome, while being cheaper and easier to implement."

Coinbase CEO Brian Armstrong had argued earlier this year that the UK stablecoin rules "are at risk of preventing the UK from being globally competitive in the digital economy," citing the holding caps directly.

In early June, the UK Parliament's Financial Services Regulation Committee published a cross-party House of Lords report telling the BoE to scrap the caps. The committee argued that pre-emptive limits on a market that barely exists don't make sense. Sterling stablecoins account for less than 0.5% of a $315 billion global market, according to CoinGecko data.

Four companies – Revolut, Monee Financial Technologies, ReStabilise, and VVTX – are already testing stablecoin products in the FCA's regulatory sandbox. Their stated aims include retail payments, wholesale settlement, and crypto trading.