Key Takeaways
- The Bank of England announced a new regulatory framework for stablecoins on Monday.
- The regulation outlines limits on stablecoin holdings.
- New rules will only apply to “systemic payment stablecoins,” as designated by the Treasury.
The Bank of England (BoE) unveiled its proposed regime for stablecoin regulation on Monday, Nov. 10, outlining a framework for issuers of GBP-denominated coins.
After the GENIUS Act galvanized global regulators into action, Threadneedle Street has vowed to get the new regime up and running “just as quickly as the U.S.”
Although the U.K. is expected to follow the U.S.’ lead in several key areas, it is charting its own course in others.
Stablecoin Regulation in the U.K.
Alongside the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSA), the Bank of England has significant leeway to regulate the stablecoin market without the need for new legislation.
Crucially, however, rules written by regulators only apply to entities that fall under their jurisdiction, i.e., banks and other financial institutions.
An exception applies to payment systems designated as systemically important under the Banking Act (2009).
The key phrase used by the BoE is “systemic payment stablecoin,” and the latest proposal only applies to sterling-denominated stablecoins that meet this definition.
“Systemic Payment Stablecoins”
With GBP stablecoins currently in their infancy, for now, the BoE’s framework is forward-looking.
Before U.K. regulators could impose any restrictions on individual consumers, the Treasury would first have to identify and designate a given stablecoin payment system as systemic.
The bar for this is incredibly high.
Consider the controversial proposal to limit individual stablecoin holdings.
For instance, although Visa and Mastercard are both considered systemically important, in 2015, the Treasury determined that American Express didn’t qualify.
For a stablecoin to warrant the designation, it would require significant adoption as a payment instrument. (The central bank isn’t looking to capture crypto trading within the new regulatory perimeter.)
Stablecoin Holding Limits
One aspect of the rulebook that was hotly debated ahead of Monday’s announcement was a proposed cap on holdings.
The BoE argues that limits are needed to prevent bank disintermediation and potential deposit flight.
Modeling different scenarios, it concluded that having no limits would place stress on the banking industry and restrict the availability of credit.
Considering this risk, the draft regulation proposes limiting individual holdings to £20,000 per systemic stablecoin and business holdings to £10 million per coin.
Businesses that require larger balances, such as crypto exchanges and some retailers, could be exempted from limits.
The central bank also considered potential workarounds for high-value payments, such as automated bank deposit-to-stablecoin conversions.
Other Nations on the Move
The U.K. isn’t the only country racing ahead with stablecoin regulation.
On Nov. 4, Canada’s 2025 budget included a proposal for new legislation that will resemble the U.S. GENIUS Act.
Meanwhile, financial authorities in Hong Kong, Japan, and South Korea are moving into the implementation phase after their governments created the necessary legal frameworks.
For the banks and technology firms building stablecoin infrastructure, recent developments create an atmosphere of excitement.
“A whole new era of currency competition and financial regulation is upon us,” Eco CEO Ryne Saxe observed to CCN:
“Canada’s recent announcement, now [the U.K.]. Other major financial systems are quickly realizing that if they don’t embrace the inevitability of stablecoins, they’re quickly falling behind, and their banks and consumers will be at a disadvantage.”
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
