Stablecoin

Bank

DeFi

Planet

<h4>Quick Breakdown&nbsp;</h4>
<ul>
 <li style="font-weight: 400;">The Bank of England has published draft regulations for sterling-backed stablecoins used on a large scale in payments.</li>
 <li style="font-weight: 400;">Issuers must back at least 40% of liabilities through deposits at the central bank and the remainder in UK government debt.</li>
 <li style="font-weight: 400;">Individual holdings may be capped at £20,000 per token, with higher allowances for businesses.</li>
</ul>
&nbsp;
The Bank of England has outlined new plans to regulate stablecoins used widely for payments, signaling a major step toward integrating digital currencies into the UK’s financial system. The central bank <a style="color: #0000ff;" href="https://www.bankofengland.co.uk/paper/2025/cp/proposed-regulatory-regime-for-sterling-denominated-systemic-stablecoins" rel="noopener noreferrer nofollow">released</a> a consultation paper on Monday detailing how sterling-backed stablecoins deemed “systemic” would be supervised to avoid risks to broader financial stability.
<figure style="width: 100%" class="wp-caption aligncenter">
 <img loading="lazy" src="https://defi-planet.com/wp-content/uploads/2025/11/Timeline-of-the-Banks-stablecoin-related-publications.png" alt="" width="2560" height="920">
 <figcaption>
 Source: <a style="color: #0000ff;" href="https://www.bankofengland.co.uk/paper/2025/cp/proposed-regulatory-regime-for-sterling-denominated-systemic-stablecoins" rel="noopener noreferrer nofollow">BOE</a>
 </figcaption>
</figure>
The consultation remains open until February 10, 2026, with final rules expected to be issued in the second half of 2026.
<h3 id="span-style-font-weight-400-key-requirements-asset-backing-and-balance-limits-span">Key requirements: asset backing and balance limits</h3>
Under the proposal, stablecoin issuers would be required to maintain strict reserves to support their tokens. At least 40% of liabilities would need to be held as non-interest-bearing deposits at the Bank of England, with the remaining 60% permitted in short-term UK government debt instruments.
The regulator also plans to impose holding limits on users to prevent excessive risk concentration. Individuals would be limited to £20,000 worth of each stablecoin, while businesses could hold up to £10 million per token. Companies requiring larger balances for operational reasons may apply for exemptions.
<blockquote>
 “We propose that issuers implement per-coin holding limits of 20,000 GBP for individuals and 10 million pounds for businesses,” 
</blockquote>
the BoE stated.
<h3 id="span-style-font-weight-400-adjusted-backing-rules-for-growing-systemic-stablecoins-span">Adjusted backing rules for growing systemic stablecoins</h3>
If a stablecoin grows large enough to be classified as systemically important, its issuer could temporarily hold as much as 95% of backing assets in government debt while scaling. However, this ratio would be reduced to 60% once the stablecoin reaches a stable size, striking a balance between safety measures and operational viability.
His Majesty’s Treasury will be responsible for designating which stablecoin payment systems meet the threshold of systemic importance. Once defined, those issuers and service providers would fall directly under Bank of England supervision.
Additionally, the Bank of England (BoE) Deputy Governor Sarah Breeden publicly <a style="color: #0000ff;" href="https://defi-planet.com/2025/11/bank-of-england-signals-rapid-stablecoin-rule-rollout-amid-financial-stability-push/" rel="noopener noreferrer nofollow">committed</a> that the UK government will match the United States’ rapid pace in establishing stablecoin regulations.
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The post <a href="https://defi-planet.com/2025/11/uk-central-bank-moves-toward-stablecoin-oversight-with-proposed-regulatory-framework/" rel="noopener noreferrer nofollow">UK Central Bank Moves Toward Stablecoin Oversight With Proposed Regulatory Framework</a> appeared first on <a href="https://defi-planet.com" rel="noopener noreferrer nofollow">DeFi Planet</a>.

UK Central Bank Moves Toward Stablecoin Oversight With Proposed Regulatory Framework

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