UK Stablecoin Rules Get Closer, Coinbase Approves

The Bank of England published an update on its draft stablecoin rules Thursday, and Coinbase liked what it read.

The bank called the update a milestone toward a “comprehensive UK regime” that sets a pathway for sterling-denominated stablecoins to operate at scale in retail and wholesale markets. The draft, open for public feedback until Sept. 22, 2026, includes a temporary guardrail on issuance per systemic stablecoin set at £40 billion.

Stablecoins are privately issued digital tokens typically tied to fiat currency. The bank said users should be able to transfer value using traditional bank deposits, tokenized deposits, stablecoins and possibly a central bank digital currency. It sees a “complimentary role” for stablecoins alongside commercial bank money in wholesale markets.

The draft differentiates between systemic stablecoins, largely used for payments, and non-systemic ones. Both will be regulated by the Bank of England and the Financial Conduct Authority. The bank said it made “substantive changes” after feedback from interested parties.

Paul Grewal, chief legal officer at Coinbase, posted on X that the UK delivered clear, workable rules. “No more wallet limits, simpler reserve requirements and recognized US oversight for foreign stablecoins,” he wrote. “We are going to see more and more clarity around stablecoins globally.”

Dollar-based stablecoins dominate the digital asset sector, led by Tether (USDT) and USDC with hundreds of billions outstanding. Pound-based stablecoins are almost non-existent. The UK rules could change that, though the timeline remains uncertain.

The Bank of England said further updates are coming soon.