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The Bank of England published a policy statement and draft Code of Practice for systemic stablecoin issuers on Monday, replacing previously proposed individual holding limits with a £40 billion ($52.9 billion) temporary issuance guardrail applied per stablecoin.
Why it matters
The shift is structurally friendlier than the framework the Bank consulted on in late 2024. Per-coin holding caps would have throttled institutional wallet sizes on any sterling-pegged token and pushed large treasury activity offshore. An issuance ceiling instead lets a recognised issuer scale user demand up to the £40B threshold before triggering additional supervisory scrutiny. For UK-anchored stablecoin operators the runway to onboard banks, payment firms and corporate treasuries just got materially longer.
Market impact
Feedback on the framework is due by Sept. 22, with the Bank targeting a finalised Code of Practice by end-2026 so recognised systemic issuers can begin operating under the regime in 2027. The cadence lines up sterling stablecoin issuance with the FSB's global stablecoin oversight standards and keeps London on a comparable footing to the EU's MiCA stablecoin regime. Watch for the named cohort of recognised issuers once the supervisory checkpoint kicks in; the £40B ceiling is high enough that it is unlikely to bind in the first years, which is itself a signal the Bank is prioritising market development over hard containment.
Frequently asked questions
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What did the Bank of England change in its stablecoin framework?
The Bank replaced its previously proposed individual holding limits for sterling stablecoins with a £40 billion ($52.9 billion) temporary issuance guardrail applied per stablecoin, set out in a new policy statement and draft Code of Practice for systemic issuers.
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Why are issuance caps less restrictive than holding caps?
Holding caps would have throttled how much any single wallet could hold on a sterling stablecoin, pushing large institutional treasury activity offshore. An issuance ceiling lets a recognised issuer scale user demand up to £40B before extra supervisory scrutiny is triggered, preserving room for institutional…
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When will the sterling stablecoin regime take effect?
Feedback on the framework is due by Sept. 22. The Bank of England is targeting a finalised Code of Practice by the end of 2026, so recognised systemic stablecoin issuers can begin operating under the regime in 2027.
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How does the BoE framework compare to the EU's MiCA stablecoin rules?
The £40B issuance guardrail and 2027 timeline align sterling stablecoin oversight with the FSB's global stablecoin standards and keep London on a comparable footing to the EU's MiCA regime, though the two regimes still diverge on reserve composition and authorisation detail.
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Will the £40B ceiling bind in the near term?
No. The Bank set the issuance guardrail high enough that sterling stablecoin supply is unlikely to hit the threshold in the first years of the regime. The ceiling functions more as a supervisory checkpoint than a hard containment tool, signalling the Bank is prioritising market development.
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