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The Bank of England opened a consultation on sterling-denominated systemic stablecoins.
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The framework includes backing rules and temporary holding limits for individuals and businesses.
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Non-sterling stablecoins like USDT and USDC remain under FCA oversight.
New Framework for Sterling-Backed Stablecoins
The Bank of England has unveiled a consultation paper outlining a regulatory framework for “systemic” GBP stablecoins — those used at scale in payments and deemed critical to financial stability. The plan aims to ensure consumer protection while supporting innovation.
Rules for Backing and Redemption
Issuers could hold up to 60% of reserves in short-term UK government debt, with the rest in unremunerated accounts at the central bank. Early-stage issuers may temporarily hold up to 95% in government debt to support liquidity.
Holding Limits and Transition Measures
To prevent rapid bank deposit outflows, the Bank proposed temporary limits of £20,000 per person and £10 million per business. These caps would be lifted once stablecoin systems are deemed stable.
Next Steps
Deputy Governor Sarah Breeden said the framework marks a “pivotal step” toward implementation in 2026. The consultation runs until February 10, 2026, after which a joint paper with the FCA will define how the rules are applied.
