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The Bank of England has revised its regulatory approach to sterling-denominated systemic stablecoins following industry feedback on an earlier consultation the central bank said in a policy statement released in June 2026. Officials dropped proposed limits that would have capped individual holdings at 20 000 pounds and corporate holdings at 10 million pounds replacing them with a temporary issuance guardrail of 40 billion pounds per stablecoin. The adjustment addresses operational difficulties in monitoring wallet sizes while still mitigating risks to financial stability and credit provision according to the Bank of England.
Backing asset requirements have been adjusted to allow issuers to hold up to 70 percent of reserves in short-term UK government debt up from a previously proposed 60 percent with the remainder kept in unremunerated deposits at the central bank the policy statement showed. This change provides firms with improved yield potential on reserves without compromising the liquidity needed for rapid redemptions at par value. The Bank of England expects the temporary guardrail to undergo regular reviews and to be removed once associated risks have eased.
The Financial Conduct Authority published complementary final rules for non-systemic stablecoins at the end of June 2026 reducing the prudential capital coefficient for issuance from 2 percent to 1 percent according to its policy statement. Under the integrated regime the FCA oversees issuance custody and disclosures for qualifying stablecoins while the Bank of England joins supervision for those designated systemic by HM Treasury. Firms transitioning from the non-systemic to the joint regime will typically receive between 12 and 36 months to adapt the authorities stated in joint guidance.
An article on OneSafe.io titled UK Stablecoin Regulation Shift: What It Means for Businesses noted that the revisions eliminate barriers that had threatened corporate use cases such as cross-border payments treasury optimisation and settlement of tokenised assets. The analysis highlighted that businesses will now face fewer constraints on transaction sizes enabling more efficient liquidity management without the enforcement complexities of per-holder caps. The platform added that the updated framework supports the UK’s ambition to foster innovation in digital payments while preserving consumer protections.
Authorisation for stablecoin-related activities opens on September 30 2026 with the full regime taking effect on October 25 2027 the FCA reported. A Treasury announcement on August 26 2026 proposed granting the Bank of England a secondary objective to promote innovation in payment systems and digital money including stablecoins alongside its primary financial stability mandate. The move aligns with broader efforts to modernise payments legislation and integrate stablecoins into regulated payment services.
The Bank of England maintained requirements for daily reconciliation of backing assets statutory trusts to protect coinholders and redemption processing within 24 hours of a completed request its policy document stated. Issuers must also meet bespoke capital standards covering operating costs and wind-down expenses with no pass-through of investment returns to holders. These provisions together with planned disclosures aim to build market confidence and facilitate orderly growth in stablecoin usage across UK businesses.
