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The Bank of England has scrapped planned limits on how much sterling-backed stablecoin users can hold, replacing them with a £40 billion issuance cap for each systemic stablecoin.
The change softens one of the parts most criticised by industry groups before rules are finalised for tokens that could be widely used in retail payments. The £40 billion cap is worth about $52.8 billion.
£20,000 User Cap is Removed
The Bank had previously considered limits of £20,000 for individuals and £10 million for businesses. Industry groups argued that those caps would be hard to operate and would make sterling stablecoins less useful than dollar or euro alternatives.
The new approach shifts the guardrail from users to issuers. Instead of monitoring how much each customer holds, systemic stablecoin issuers would face a total supply limit per coin.
Issuers Face £40B Supply Limit
The issuer-level cap gives firms more room to build payment products without forcing wallets, exchanges and merchants to manage customer-level limits. It also keeps the Bank focused on deposit outflows from the banking system, one of its main concerns around widely used sterling stablecoins.
The change marks a softer approach, but not a full removal of limits. Systemic issuers would still have to stay within the Bank’s proposed £40 billion cap per stablecoin.
Issuers Can Hold 70% in Government Debt
The Bank also eased its reserve proposal. Issuers of widely used stablecoins would be allowed to hold up to 70% of backing assets in short-term government debt, up from the earlier 60% proposal. The rest would need to sit in non-interest-bearing deposits at the central bank.
That gives issuers more income-producing assets in the reserve pool, but it still leaves 30% of backing assets earning no interest at the Bank of England. That remains a key commercial issue for firms deciding whether to launch sterling stablecoins.
24-Hour Reimbursement Rule Remains
Issuers would also be required to hold backing assets in a statutory trust and reimburse holders within 24 hours. Those requirements keep the regime focused on consumer protection, reserve safety and confidence in payment stablecoins.
They also show that the Bank is easing some commercial constraints while keeping tight control over systemic sterling tokens.
Feedback Deadline is September 22
The changes follow pressure from lawmakers and crypto industry groups. A House of Lords committee had urged the Bank, the Financial Conduct Authority and HM Treasury to adapt the regime as the UK stablecoin market develops.
Reaction was mixed. Innovate Finance viewed the regime as overly conservative, while Coinbase said the reserve requirements and capital framework were workable.
The Bank said it still wants feedback by September 22 on remaining industry challenges. The next step is final rulemaking with the FCA, with the Bank aiming to allow regulated stablecoins to operate from next year.
