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Bank of England Proposes Regulatory Framework for Stablecoins

Monday Nov 10 2025 10:20

1 min

Table of Contents

1. Bank of England Proposes Regulatory Framework for Stablecoins
1.1 Backing Requirements and Holding Limits
1.2 Holding Limits, Backing, and Oversight

Bank of England Proposes Regulatory Framework for Stablecoins

The United Kingdom's central bank is progressing towards stablecoin regulation by publishing a consultation paper outlining a proposed regulatory framework for the asset class. The Bank of England (BoE) released a proposed regulatory regime for sterling-denominated “systemic stablecoins,” defined as tokens widely used in payments and potentially posing risks to UK financial stability.

Backing Requirements and Holding Limits

Under the proposal, stablecoin issuers would be required to back at least 40% of their liabilities with non-interest-bearing deposits at the BoE. The remaining 60% can be held in short-term UK government debt. The consultation paper seeks feedback on the proposed regime until February 10, 2026, with the BoE planning to finalize regulations in the second half of the year.

Holding Limits, Backing, and Oversight

The central bank suggests capping individual stablecoin holdings at £20,000 ($26,300) per token. Retail businesses could be exempt from the proposed £10,000 ($13,200) limit. “We propose that issuers implement per-coin holding limits of £20,000 for individuals and £10 million for businesses,” the BoE stated. Businesses requiring higher balances during normal operations could qualify for exemptions. Regarding stablecoin backing, systemically important issuers could hold up to 95% of their backing assets in UK government debt securities during scaling. “The percentage would be reduced to 60% once the stablecoin reaches a scale where this is appropriate to mitigate the risks posed by the stablecoin’s systemic importance without impeding the firm’s viability,” the BoE added. The UK Treasury determines which stablecoin payment systems and service providers are deemed systemically important. Once designated, these systems will fall under the proposed regime and BoE supervision.

Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

Written by:

Emma Rose

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Bank of England Proposes Regulatory Framework for Stablecoins

Bank of England Proposes Regulatory Framework for Stablecoins

Backing Requirements and Holding Limits

Holding Limits, Backing, and Oversight

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