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The Bank of England scrapped individual holding caps for sterling stablecoins on Monday, replacing them with a temporary £40 billion issuance limit per coin while easing reserve rules.
<h2 id="key-points">Key Points:</h2>
<blockquote>
 <ul>
 <li>The central bank dropped proposed caps on individual stablecoin holdings, setting a £40 billion limit on total issuance per coin.</li>
 <li>Issuers can now hold up to 70% of backing assets in short-term UK government debt, up from 60%.</li>
 <li>Final rules are due by the end of 2026, opening the way for regulated stablecoins in 2027.</li>
 </ul>
</blockquote>
<h2 id="stablecoin-caps-swapped-for-issuance-limit">Stablecoin Caps Swapped For Issuance Limit</h2>
The central bank <a href="https://cryptobriefing.com/boe-sterling-stablecoin-40b-cap/" rel="noopener noreferrer nofollow">published</a> its final policy statement and a draft rulebook Monday.
The package softened measures that issuers had warned could choke a sterling-backed market before it took hold. It covers only systemic coins, those used widely enough in payments to pose financial-stability risks.
It <a href="https://crypto.news/bank-of-england-drops-stablecoin-holding-caps-in-final-uk-rules/" rel="noopener noreferrer nofollow">dropped</a> plans to limit how much of a coin any single person or firm could hold, levels floated last November near £20,000 for individuals and £10 million for businesses. Systemic coins will also be barred from self-custody and limited to regulated firms such as banks and exchanges.
The £40 billion ceiling, worth about $52.8 billion, now applies to total issuance per coin. Officials <a href="https://www.globalbankingandfinance.com/bank-england-softens-stablecoin-rules-final-framework/" rel="noopener noreferrer nofollow">framed</a> it as a temporary guardrail, not a curb on daily use, and pledged to lift it once risks to bank lending fade. Issuers can also hold up to 70% of reserves in short-term UK government debt, up from 60%, with the rest parked at the Bank.
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<h2 id="breeden-coinbase-back-final-regime">Breeden, Coinbase Back Final Regime</h2>
Deputy Governor Sarah Breeden welcomed the framework, calling it a boost for competition in UK payments. The rules still bar issuers from paying interest, though payment-linked rewards remain allowed, and demand face-value redemption within 24 hours.
Coinbase's head of policy for Europe, Katie Harries, <a href="https://www.cryptotimes.io/2026/06/22/bank-of-england-eases-stablecoin-rules-with-40b-issuance-cap/" rel="noopener noreferrer nofollow">said</a> the rules rank among "the strongest stablecoin regimes in the world." She also pressed for clarity on how long the per-coin cap will last.
The Bank has long warned that widely used stablecoins could pull deposits from lenders and squeeze credit.
<h2 id="sterling-stablecoins-eye-2027-market-launch">Sterling Stablecoins Eye 2027 Market Launch</h2>
The reversal followed months of lobbying from the crypto industry. Breeden <a href="https://www.banklesstimes.com/articles/2026/06/22/bank-of-england-softens-stablecoin-rules-scraps-individual-holding-caps/" rel="noopener noreferrer nofollow">conceded</a> in May the Bank was "looking very hard" at its caps, and officials now aim to finalize the rules before regulated coins launch in 2027.
Dollar-pegged tokens such as Tether<a href="https://yellow.com/asset/usdt" rel="noopener noreferrer nofollow">(USDT)</a> and USD Coin<a href="https://yellow.com/asset/usdc" rel="noopener noreferrer nofollow">(USDC)</a> still dominate the market and stay under the Financial Conduct Authority, leaving the UK the only major economy capping issuance of a coin in its own currency.
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Bank Of England Bets £40B Issuance Cap Can Replace Stablecoin Restrictions

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