Bank of England Reconsiders Stablecoin Ownership Caps and Reserve Rules

The Bank of England (BoE) is reviewing key parts of its draft stablecoin framework after industry pushback. Deputy Governor for Financial Stability Sarah Breeden told the Financial Times that the central bank will reconsider the proposed £20,000 limit on individual holdings of UK‑sterling stablecoins and the £10 million cap for businesses. The BoE is also re‑examining a rule that would require stablecoin issuers to keep at least 40% of reserve assets on deposit at the BoE without earning interest, with the remainder invested in short‑term UK government debt. Industry groups described the limits as “cumbersome” and warned they could make the UK less competitive for digital‑asset firms compared with jurisdictions such as the United States.

Breeden said the BoE is “genuinely open to thinking whether there are other ways of achieving our objective” and will assess whether the original safeguards are overly conservative, noting the rules were based on liquidity‑stress scenarios like the 2023 Silicon Valley Bank collapse. Stablecoins currently represent less than 0.5% of a global market worth over $320 billion, but the BoE aims to ensure any new form of money is safe while supporting innovation. The reassessment comes as other countries advance their own stablecoin regulatory regimes, putting pressure on the UK to balance financial stability with competitiveness in the digital‑finance sector.