The Bank of England has released a draft regulatory framework that would limit individual stablecoin holdings and introduce new rules for backing and oversight.
The proposal sets a temporary cap of £20,000 for individuals and £10 million for businesses to prevent large-scale outflows of bank deposits into digital assets. Issuers would be required to hold 40% of their reserves in non-interest-bearing deposits at the BoE and 60% in short-term UK government bonds. The Bank plans to lift these limits once financial stability risks have eased.
The BoE will accept feedback until February 2026 and expects to publish the final framework in the second half of the year. The FCA will regulate non-systemic stablecoins, while the BoE will focus on those widely used for payments.
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