Overview
- Issuers of sterling ‘systemic’ stablecoins would hold at least 40% of reserves as unremunerated deposits at the Bank of England with up to 60% in short‑term UK government debt, rising temporarily to 95% for newly systemic issuers.
- Temporary per‑coin holding limits would set a £20,000 cap for individuals and £10 million for businesses, with possible exemptions for large firms and no caps for wholesale use in the Digital Securities Sandbox.
- HM Treasury would designate which coins are systemic, the Bank of England would oversee prudential and financial‑stability risks, and the Financial Conduct Authority would handle conduct and consumer protection.
- The Bank is considering a central‑bank liquidity backstop for systemic issuers during market stress, a shift from earlier thinking that could provide lender‑of‑last‑resort support.
- The consultation runs until Feb. 10, 2026 with final rules expected in the second half of 2026, as Deputy Governor Sarah Breeden defends caps as transitional safeguards and industry groups criticize them as overly restrictive.