Overview
- Issuers of systemic sterling stablecoins would face temporary per‑coin limits of £20,000 for individuals and £10 million for businesses, with exemptions for large firms and plans to remove the caps once risks ease.
- Backing rules require at least 40% of reserves in unremunerated Bank of England deposits and up to 60% in short‑term UK government debt, with a transitional allowance of up to 95% gilts for new or transitioning issuers.
- HM Treasury would designate which stablecoins are systemic, the Bank of England would oversee prudential and financial stability risks, and the Financial Conduct Authority would handle conduct and non‑systemic tokens.
- The Bank is considering a central‑bank liquidity backstop to support systemic issuers in periods of market stress so redemptions can be met reliably.
- The consultation runs until February 10, 2026, with a BoE‑FCA joint approach paper due next year and final rules planned for the second half of 2026, as industry groups warn the caps could leave the UK less competitive than the U.S.