The Bank of England (BoE) has published its policy position for the regulation of systemic stablecoin issuers, setting out a framework designed to support the development of sterling-denominated stablecoins while maintaining financial stability protections.
The publication marks what the Bank describes as “a significant milestone in delivering a comprehensive UK regime for stablecoins” and establishes a pathway for UK-issued, sterling-denominated stablecoins to operate at scale across retail and wholesale use cases.
Among the most significant changes from the Bank’s November 2025 consultation is the replacement of proposed holding limits with a temporary issuance cap.
The Bank says it will not implement the £20,000 individual and £10 million business limits, replacing them with a temporary £40 billion issuance guardrail per systemic stablecoin product
According to the Bank, the measure is intended to mitigate risks to credit provision during the transition to wider stablecoin adoption while avoiding the operational challenges associated with holding limits.
The Bank says it will “regularly review the guardrail, and we expect to loosen, and ultimately remove the guardrail once we are satisfied that the risk to credit provision has been effectively mitigated”.
The BoE has also revised its proposed backing asset requirements.
Under the updated framework, systemic stablecoin issuers will be required to hold 30 per cent of backing assets in unremunerated deposits at the Bank of England and 70 per cent in short-term UK government debt securities with maturities of up to six months.
This replaces the previously proposed 60/40 structure.
The Bank says the revised calibration reflects consultation feedback and “supports a viable business model for issuers while mitigating financial stability risks”.
It adds: “We have adjusted our position to settle on bringing the central bank deposit requirement down to 30 per cent, aligning the regime with historical liquidity stress events.”
The central bank deposit portion will remain unremunerated.
“The central bank deposit share will remain unremunerated as stablecoins are intended to be a payments instrument, rather than a store of value and therefore will not play a role in monetary policy transmission,” the BoE says.
The framework also introduces a range of safeguards for coinholders.
Systemic stablecoin issuers will be required to maintain one-to-one backing of all coins in circulation, provide coinholders with a direct legal claim against the issuer, and process redemption requests within 24 hours of receiving a complete redemption request.
The Bank says issuers “must ensure that coinholders can redeem their coins at any time” and confirms that systemic issuers will not be permitted to suspend redemptions.
The BoE will also prohibit interest payments on systemic stablecoins.
However, activity-based incentives linked to payments and transaction activity will be permitted.
“We will maintain our policy that systemic stablecoin issuers should not pay interest to coinholders,” the Bank says.
At the same time, it will allow “activity-based rewards and other benefits or incentives that are consistent with the use of a stablecoin as a means of payment”.
The policy statement also confirms plans for a Central Bank Liquidity Facility for eligible systemic stablecoin issuers.
The facility will provide short-term collateralised lending against holdings of sterling-denominated UK government debt securities and is intended to support redemption activity during periods of market stress or operational disruption.
The Bank says the facility is designed “to reinforce confidence in sterling-denominated stablecoins, through its role as a backstop facility from which issuers can source liquidity”.
Alongside the stablecoin-specific measures, the publication reiterates the Bank’s wider vision for a future payments ecosystem in which multiple forms of money coexist.
The Bank says stablecoins could support a range of retail payment use cases, including person-to-person transfers, merchant payments, online purchases and cross-border payments, while also potentially playing a complementary role in wholesale markets alongside commercial bank money.
It notes that stablecoins form part of a broader framework that could include tokenised bank deposits and, potentially, a retail central bank digital currency.
The consultation on the draft Code of Practice for systemic stablecoin issuers remains open until 22 September 2026.
The Bank intends to finalise the Code of Practice by the end of 2026 and publish additional guidance and supporting materials during 2027.
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