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- Bank of England replaces individual stablecoin caps with a temporary £40B coin limit.
- Users can transact freely as issuers face stricter controls on total stablecoin supply.
- Systemic issuers must keep one-to-one backing and meet new 24-hour redemption rules.
The Bank of England has dropped planned limits on stablecoins held by individuals. It will instead cap each systemic coin at £40 billion on a temporary basis. The shift removes wallet limits that drew enforcement concerns from respondents during consultation.
As per the report, the earlier plan set a £20,000 limit for each person. It also set a £10 million limit for businesses. Respondents said those caps would be costly, hard to enforce, and difficult across wallets.
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Stablecoin Rules Shift Focus to Issuer-Level Limits
The revised approach shifts control from users to issuers. Each qualifying coin must stay under the £40 billion ceiling while the rule remains active. Users may transact without size, frequency, or purpose limits, subject to other laws.
The Bank said stress tests supported the structure. It found the issuance cap could similarly protect against deposit outflows. Still, officials warned wider stablecoin use could weaken commercial bank liquidity.
The Bank also cited pressure on lending. It said a move into stablecoins could reduce credit supply. It could also raise borrowing costs for households and businesses.
The proposed limit would still allow major payment flows. The Bank said it could support activity comparable with Faster Payments and card networks. Those systems process between £1.4 billion and £2.2 billion daily.
The ceiling would equal about 10% of average daily CHAPS settlement value. That would leave room for stablecoins in payments without unlimited launch growth. The Bank plans to review the cap before removal.
BoE Updates Reserve Rules for Systemic Stablecoin Issuers
Reserve rules were also changed for systemic issuers. They may hold 70% of backing assets in short-term sterling government debt. The earlier proposal set that share at 60%.
Those securities must mature within six months. At least 30% of reserves must stay in unremunerated Bank of England deposits. Commercial bank deposits will not qualify.
Each token must keep one-to-one backing. Customer assets must be separated through statutory trusts. Holders get a direct legal claim if the issuer fails.
Valid redemption requests should be completed immediately where possible. They must be completed within 24 hours when instant settlement is unavailable. Systemic issuers cannot pay interest only for holding tokens.
The framework applies to stablecoins designated systemic by HM Treasury. The Bank and FCA will supervise them, while non-systemic stablecoins stay with FCA oversight. Feedback closes September 22; final rules are planned for late 2026 and operations in 2027.
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