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The Bank of England published its final policy framework and draft rules for sterling-denominated systemic stablecoins, walking back several of the stricter proposals from last year's consultation.
Why it matters
The most significant change: the BoE scrapped plans to cap individual stablecoin holdings outright, instead opting for a per-issuer issuance ceiling initially set at £40 billion. Reserve backing requirements were also relaxed. The central bank said it aims to finalize the rules by the end of 2026.
Market impact
The framework is the first major regulatory corridor for systemic stablecoins in the UK and a template other jurisdictions are watching. The removal of individual holding caps is a clear concession to issuers, who warned that per-wallet limits would choke institutional adoption. A £40 billion issuance ceiling, generous in scale, gives authorised issuers room to scale. Combined with looser reserve rules, the framework tilts toward making London a viable venue for institutional stablecoin activity, provided the final text holds.
Source: [Sterling-denominated systemic stablecoins](https://www.bankofengland.co.uk/paper/2026/ps/sterling-denominated-systemic-stablecoin)
Frequently asked questions
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What did the Bank of England change in its final stablecoin framework?
The BoE scrapped plans to cap individual stablecoin holdings, replacing them with a per-issuer issuance ceiling initially set at £40 billion. Reserve backing requirements were also relaxed, and the central bank said it aims to finalize the rules by end-2026.
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Why did the BoE drop individual holding caps?
Issuers had warned during the consultation that per-wallet limits would prevent institutional adoption. The BoE opted for a per-issuer ceiling, which gives scale without restricting how authorised wallets hold or transfer the token.
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What is the £40 billion issuance limit per stablecoin?
It is the total maximum amount of any single systemic stablecoin that an authorised issuer is allowed to circulate under the BoE framework. It replaces the individual-holder cap that was in earlier drafts.
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When will the UK stablecoin rules be finalized?
The Bank of England has set a target of finalizing the framework by the end of 2026, following the current consultation period on the draft Code of Practice.
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How does the UK framework compare to other jurisdictions?
It is the first major G7 regulatory corridor for systemic stablecoins. The issuance-ceiling approach and relaxed reserve rules are among the more issuer-friendly design choices globally, and other regulators are likely to study the final text.
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