Bank of England Softens Stablecoin Rules With New 40 Billion Pound Cap

The Bank of England has released updated draft rules for systemic stablecoins, easing earlier restrictions and introducing a temporary issuance cap of 40 billion pounds as part of the country’s upcoming crypto payment framework.

Systemic stablecoins are digital payment tokens considered large enough to affect financial stability in the United Kingdom. Under the revised proposal, issuers will now be allowed to hold up to 70% of reserves in interest-bearing government debt, compared with the previous 60% limit.

Stablecoin Issuance Cap Replaces Holding Limits

The central bank also removed proposed limits that would have restricted how much stablecoin individuals and businesses could hold. Earlier proposals suggested caps of 20,000 pounds for individuals and 10 million pounds for companies.

Officials said the new issuance-based guardrail is designed to reduce risks to the banking system while allowing stablecoins to be used more freely for payments and transactions.

Industry Feedback Influenced Rule Changes

The updated framework follows criticism from digital asset firms that earlier restrictions would have limited adoption and weakened the competitiveness of UK-issued stablecoins compared with dollar-backed alternatives.

The Bank of England plans to finalize the stablecoin rulebook by the end of 2026 before a full rollout expected in 2027.