The Bank of England (BoE) has taken another major step toward shaping the UK’s digital asset landscape. In its newly released consultation paper, the central bank outlined a regulatory framework for systemically important stablecoins denominated in British pounds — digital assets that will soon play a key role in the UK’s payment ecosystem.
Under the proposal, the BoE plans to introduce ownership limits for individuals and companies, yet it has allowed specific exemptions for retail corporations and cryptocurrency exchanges following strong feedback from market participants. According to the document, individuals will be permitted to hold up to £20,000 in these regulated stablecoins, while businesses will be allowed up to £10 million. However, retail companies such as supermarkets, as well as crypto exchanges that handle large transaction volumes, could be exempt from these caps altogether.
BoE Governor Andrew Bailey emphasized that public trust in money is vital for financial stability. The new regime, he explained, aims to ensure that digital assets inspire the same level of confidence as traditional forms of currency. “We want people to have the same trust in new forms of money as they do in existing ones,” Bailey said. “Regulated stablecoins can provide faster, cheaper, and more efficient domestic and cross-border payments.”
The Bank also confirmed its ambition to create a multi-currency system where stablecoins, tokenized bank deposits, and central bank money can coexist harmoniously. This ecosystem will ensure that central bank reserves remain the foundation of the UK’s financial structure while enabling innovation through digital payments.
The proposed framework requires stablecoin issuers to maintain 40% of their reserves in non-interest-bearing deposits with the Bank of England, while the remaining 60% can be invested in short-term government bonds. For issuers transitioning to systemic status, the BoE will allow up to 95% of reserves in government bonds to support market viability. The central bank is also considering implementing liquidity mechanisms to help issuers convert assets in case of sudden redemption demands.
Sarah Breeden, Deputy Governor for Financial Stability, highlighted that the objective remains unchanged: “Our goal is to foster innovation while maintaining trust in this new form of money. We’ve listened carefully to industry feedback and adjusted our proposals accordingly.”
The BoE also announced plans to coordinate with the Retail Payments Infrastructure Board, which is designing the infrastructure for the UK’s future retail payment systems. This initiative will help ensure interoperability between stablecoins, tokenized deposits, and traditional financial instruments.
The regulatory framework, set to take full effect by 2026, will apply exclusively to UK-issued stablecoins used for payments and classified by the Treasury as systemically important. Other crypto tokens will remain under the supervision of the Financial Conduct Authority (FCA).
Conclusion: The Bank of England’s approach to regulating stablecoins reflects a careful balance between financial innovation and systemic security. By easing restrictions and allowing specific exemptions, the BoE signals its willingness to support blockchain-driven progress while preserving trust in the monetary system. As the UK prepares for its 2026 rollout, the initiative could become a global model for responsible stablecoin regulation.
