The Bank of England has recently unveiled a proposed framework for regulating stablecoins, igniting discussions within the financial industry and among cryptocurrency enthusiasts. The central bank’s consultation paper, released on Monday, focuses on sterling-denominated “systemic stablecoins” that are widely used for payments and could potentially pose risks to financial stability.
Under the proposed rules, stablecoin issuers would be required to back at least 40% of their liabilities with unremunerated deposits at the Bank of England, with the remaining 60% allowed to be held in short-term UK government debt. Systemically important issuers could initially hold up to 95% in government debt, with the level gradually reduced to 60% as the stablecoin grows.
Individual users could face a cap of 20,000 pounds per coin, while businesses may be limited to holding up to 10 million pounds. Exemptions may be granted to businesses requiring higher balances for normal operations, subject to approval by the Treasury and the Bank of England.
The consultation period for feedback on the proposed regulations runs until February 10, 2026, with the central bank aiming to finalize the regulatory framework in the second half of the year. The Bank of England emphasized that the proposed limits on stablecoin holdings are temporary and are intended to maintain financial stability while allowing stablecoins to play a role in the UK’s multi-currency payments system.
Deputy Governor Sarah Breeden highlighted that regulated stablecoins are likely to have a place in the UK market over time, but rapid shifts from traditional bank deposits into stablecoins could potentially destabilize credit for households and businesses. The Treasury will play a crucial role in designating which stablecoin systems and providers are considered systemically important, subjecting them to the Bank of England’s oversight and ongoing supervision.
The proposed regulations have sparked debate and uncertainty within the cryptocurrency community, with some expressing concerns about potential limitations on individual and business holdings of stablecoins. However, others view the regulations as a necessary step towards ensuring financial stability and mitigating risks associated with the growing use of stablecoins in the payments ecosystem.
As the consultation period progresses and stakeholders provide feedback, the final rules set by the Bank of England in 2026 will likely shape the future landscape of stablecoin regulation in the UK and beyond.
#NexSouk #AIForGood #EthicalAI #CryptocurrencyRegulation #FinancialStability
References:
– Cointelegraph: [Bank of England launches stablecoin consultation, plans final rules in 2026](https://cointelegraph.com/news/bank-of-england-stablecoin-consultation-final-rules-h2-2026?utm_source=rss_feed&utm_medium=rss?noCache%3Dtrue%26_dc%3D1762770157939%26__%3D1762770157939&utm_campaign=rss_partner_inbound)
– Finance Magnates: [Bank of England Proposes Stablecoin Rules, Capping UK Retail at £20K and Business at £10M](https://www.financemagnates.com/cryptocurrency/bank-of-england-proposes-stablecoin-rules-capping-uk-retail-at-20k-and-business-at-10m/)
– CoinDesk: [Bank of England Confirms Plans for ‘Temporary’ Stablecoin Holding Limits](https://www.coindesk.com/policy/2025/11/10/bank-of-england-confirms-plans-for-temporary-stablecoin-holding-limits)
– PYMNTS: [Bank of England Proposes Limits on Individual Stablecoin Ownership](https://www.pymnts.com/cryptocurrency/2025/bank-of-england-proposes-limits-individual-stablecoin-ownership/)
Social Commentary influenced the creation of this article.
🔗 Share or Link to This Page
Use the link below to share or embed this post:
