The Bank of England (BOE) has set out its proposed StableCoin regulatory regime, confirming plans to impose limits on holdings per coin.
The The UK central bank said on Monday it was proposing The “temporary” limits are 20,000 pounds ($26,300) per coin for individuals and 10 million pounds for businesses.
The BOE added that these limitations will be removed when the financial system moves to include StableCoins, digital tokens that are pegged to the value of a traditional financial asset (tradfi) such as a fiat currency.
As previously reported, the BOE may also exempt businesses that need to hold large balances, such as crypto exchanges and even supermarkets, According to the consultation paper.
The BOE plans to introduce holding limits met with criticism from some cryptocurrency groupswhich branded them dysfunctional, when they were first reported in September.
Industry groups have warned that the UK will have stricter rules than jurisdictions such as the US or the European Union (EU), potentially making it an unattractive market in which to do business.
Sarah Breeden, Boe’s deputy governor for financial stability, said recently that these limits are necessary to Curb the sustainability risk of the commercial banking sectorwhich is what most people rely on for mortgages.
“These proposed measures, while looking harsh at first glance, will benefit systemic stablecoins in the medium and long term to become a reliable method of exchanging value and a real alternative to current forms of digital currency,” Etay Katz, head of digital assets at law firm Ashurst, said in an emailed comment.
The Bank of England’s backing proposals
The BOE has also suggested StableCoin issuers have the ability to have up to 60% of their assets backing short-term UK government debt with the other 40% provided through unstructured accounts at the Bank of England.
An exception to this framework, however, are StableCoins issuers transitioning to systematics, who may hold 95% of their backing assets in short-term debt to support their early growth.
The Central Bank pointed out that its proposed framework only applies to “sterling-denominated systemic stablecoins”—digital tokens pegged to the UK currency that can be used for retail payments and wholesale settlements. StableCoins used for non-systemic purposes, such as trading cryptoassets, will be regulated by the Financial Conduct Authority (FCA), the BOE said.
The BOE’s proposals are now open for consultation until February 10 2026, after which it will finalize its rules, which set detailed requirements for StableCoin issuers, later in 2026.
