Key Highlights
- Deputy Governor Sarah Breeden said the new stablecoin rules will be operational “just as quickly as the U.S.
- Proposed rules will be unveiled on Monday, November 10, with a consultation to follow.
- The regulations will apply in the United Kingdom, under the oversight of the Bank of England and the Financial Conduct Authority.
- Temporary limits of £20,000 for individuals and £10 million for businesses will be set until risks to banks and mortgages are addressed.
The Bank of England (BOE) is moving ahead with plans to regulate stablecoins, which are digital currencies backed by cash or other assets, reassuring the market that Britain is not falling behind the U.S. on digital asset oversight.
Deputy Governor Sarah Breeden said Wednesday that the new rules will be operational “just as quickly as the U.S.,” countering industry concerns about Britain lagging in this space.
As per a Bloomberg report, the central bank plans to unveil its proposed rules on November 10, with the consultation. The rules will initially focus on “systemic” stablecoins, those likely to be widely used for payments, while smaller stablecoins will remain under lighter oversight by the Financial Conduct Authority (FCA).
Breeden said the UK is moving quickly to set up stablecoin regulations and explained that the approach is more cautious than in the U.S. because most mortgages come from commercial banks, making temporary caps on stablecoin holdings more relevant. She added that coordinating the rules carefully is “a fabulous opportunity” for the financial system.
Temporary limits and why they matter
The proposed regulations will include temporary limits: up to £20,000 ($26,000) for individuals and £10 million for businesses, as per the Bloomberg report. These caps are expected to remain in place until the Bank of England is satisfied that stablecoins do not threaten banks or mortgage availability.
Breeden also acknowledged concerns about the limits but said they are “less of an issue in practice than people might think.”
“People in the UK get their mortgages from commercial banks and so that issue that we talked about, about the need for limits as we transition to a world of stablecoins is one that is less pertinent to the US regime,” she added.
She explained that the UK’s cautious approach reflects how mortgages are mostly funded through commercial banks, unlike in the U.S., where they come from government-backed entities and financial markets.
Bailey on stablecoins
Previously, the Bank of England had cautioned that stablecoins could undermine trust in traditional money if they became too popular. Governor Andrew Bailey said central banks need to “watch carefully” how payment systems are changing, noting that if stablecoins emerge as a new form of money, it will be important to maintain trust in the currency.
Last month, Bailey highlighted that being cautious does not mean opposing stablecoins. He emphasized that the UK should benefit from the technology while keeping safeguards similar to those applied to traditional money. He has even hinted that a consultation paper outlining the proposed regime will be published in the coming months.
Meanwhile, Canada also introduced its first federal rules for stablecoins under the 2025 budget. The Bank of Canada will spend $10 million over two years to oversee the rollout, with ongoing costs of about $5 million per year to be recovered from regulated stablecoin issuers.
Together, the UK and Canada’s steps show that major economies are moving to establish structured oversight for stablecoins, balancing innovation with financial stability.
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