Key Highlights
- The Bank of England may ease limits on stablecoin holdings after criticism from the crypto industry.
- Proposed rules included £20,000 limits for individuals and £10 million for businesses, plus 40% of assets held at the BoE, but these may change.
- Draft rules are expected in June 2026, with final regulations by the end of the year.
The Deputy Governor of the Bank of England, Sarah Breeden, said that the bank may relax its planned rules on stablecoin holdings after hearing criticism from the crypto industry.
She told the House of Lords Financial Services Regulation Committee on Wednesday that the central bank was “genuinely open” to changing its proposals and welcomed ideas that could meet financial stability goals, Bloomberg reported.
The consultation started in November 2025 and focused on “systemic” sterling stablecoins, which are digital coins linked to the pound and could be used widely in everyday payments. The BoE is now reviewing its proposals to ensure the rules are fair while protecting the UK economy.
Industry pushback amid concerns
Breeden said she was disappointed that companies had not suggested useful alternatives. She said, “What we’ve been a bit disappointed with… is nobody said, ‘why not do it this way?’…Instead, what we’ve had is a ‘don’t do this’.”
The central bank initially proposed temporary limits of £20,000 for individuals and £10 million for businesses, along with a requirement that stablecoin issuers hold 40% of their assets as unremunerated deposits at the BoE. The rules were designed to stop people from moving money too quickly from banks to stablecoins, which could affect bank lending in the UK.
Industry groups have warned that the caps could be hard to enforce and might stop innovation. Early stablecoin issuers, like Tokenized GBP, said the limits could be “really damaging for the UK” because a £10 million limit for businesses would make it hard to operate.
Experts also pointed out that tracking who holds stablecoins is difficult because they can be freely traded on secondary markets.
Tom Rhodes, chief legal officer at Agant, said, “Having that transferability in the secondary market is part of the benefit of stablecoins and makes it globally accessible, but it means tracking who’s holding what is not necessarily even possible, and it would be a massive administrative burden.”
Breeden said the BoE would review the 60:40 split on backing assets, but it might be “overly conservative.” She added that the bank is open to other ways to protect the economy without strict holding limits.
The draft rules are expected in June 2026, and final regulations should be ready by the end of the year.
Interest in stablecoins surges in the UK market
Meanwhile, stablecoins have grown in popularity because they allow faster and cheaper payments, but coins linked to the pound are still rare in the market. There are also questions about how widely they will be used in the UK, including whether people and businesses will adopt them.
Breeden said the rules are meant to make the shift to digital currencies orderly and safe, which will give businesses and customers time to adjust.
Also Read: South Korea Excludes Stablecoins from Corporate Investment Scope
