Jun 22, 2026, 10:48 a.m.
2 min read
Summary
- The Bank of England scrapped its plan to cap individual and corporate stablecoin holdings and will instead temporarily limit the total circulation of any single systemic stablecoin to £40 billion.
- Regulators cut the required share of non-interest-bearing central bank deposits backing stablecoins to 30%, allowing issuers to invest up to 70% of reserves in short-term U.K. government debt while still banning interest payments to coin holders.
- The reversal, prompted by industry pushback and a House of Lords committee, is intended to preserve business viability and competitiveness, with the guardrail expected to be phased out as the market matures ahead of full U.K. crypto rules in 2027.
The Bank of England officially reversed its controversial proposal to limit how much stablecoin individuals and consumers could hold, bowing to pressure from a U.K. House of Lords committee and the crypto industry.
The central bank said it will abandon its plans to impose a £20,000 ($27,000) holding limit on individuals and a £10 million limit on corporations, in a statement on Monday, Instead, the BOE is pivoting to a macro-level "temporary issuance guardrail," capping the total circulation of any single systemic stablecoin at £40 billion ($50.6 billion).
The central bank also lowered to 30% the amount of backing assets in central deposits yielding no interest they require issuers of stablecoins, digital currency pegged to fiat, to have. This allows for stablecoin firms permitting companies to allocate up to 70% of their reserves into yield-generating, short-term U.K. government debt (T-bills) with maturities under six months, according to the statement.
While issuers can harvest yield from these T-bills, the BoE is strictly banning companies from paying interest or dividends directly to users for simply holding the stablecoin. However, the bank is explicitly permitting activity-based rewards, such as cash-back tokens or loyalty points linked directly to payment transactions via Web3 apps.
The BOE said it agreed with feedback received during a consultation period that ended earlier this month which suggested its proposed restrictions affected business model viability and international competitiveness. “We acknowledge the issues raised and have reviewed the analysis supporting the calibration,” the bank said.
The reversal also follows a report earlier this month by the cross-party Financial Services Regulation Committee of the U.K. Parliament's second chamber asking the BOE to reconsider its proposed limits, which “could have a significant impact on the business viability of stablecoin issuers.”
The U-turn marks a significant victory for the crypto industry, which argued that the original, "overly conservative" caps would severely stifle innovation.
Under the new framework, everyday users and large businesses will no longer face restrictions on the amount, frequency or type of stablecoin transactions they can make. The BOE noted that the new stablecoin issuer cap is designed to protect the broader U.K. credit system from sudden capital flight while allowing innovation, global competition and growth to take place.
The bank said it intends to scale back and eventually eliminate the guardrail entirely once the market stabilizes. Following a final feedback window closing in September, the new framework will clear the runway for regulated stablecoins to officially go live in the U.K. in 2027, when the country’s crypto rules are expected to come into effect.
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10