The move, announced 22 June 2026, marks a significant concession to industry after months of sustained pushback and sets the stage for a regulated UK stablecoin market to launch in 2027.

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The BoE's revised framework governs "systemic" stablecoins: sterling-denominated digital tokens large enough, or sufficiently interconnected, in the Treasury's assessment, to pose risks to UK financial stability if they failed.

That designation, made under the Banking Act 2009, triggers BoE oversight rather than the lighter-touch Financial Conduct Authority regime that applies to smaller issuers. The policy statement published on 22 June 2026 also raises the minimum proportion of reserves that must be held in short-term UK government debt from 60% to 70%. The remaining 30% must sit in non-interest-bearing central bank deposits, a reduction from the previous 40% requirement, which meaningfully lowers the cost burden on issuers.

A draft Code of Practice accompanying the statement is open for consultation until 22 September 2026, with a final version expected by year-end.

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The previous draft had proposed a hard cap of £20,000 on how much any individual could hold in a single systemic stablecoin.

Coinbase's head of policy for Europe, Katie Haries, described the caps as "a cap on innovation, with real and significant risks for UK competitiveness."

BoE Deputy Governor Sarah Breeden acknowledged the concern directly. "It was based on experience of potential liquidity stress," she said of the original cap. "But we will look hard to see if we have been overly conservative." Breeden also described the broader ambition of the revised framework: "Innovation thrives on trust. And today we've set out the foundations of that trust for a new form of money, with prompt redemption, strong protections and central bank support."

The £40 billion aggregate limit is described in the policy statement as a temporary transition measure, subject to review as regulators gather more data on how stablecoin growth interacts with bank credit supply.

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The revised reserve rules also address a commercial viability complaint that had circulated since the 2025 consultation. Under the old framework, the requirement to park 40% of reserves in non-interest-bearing BoE deposits was calculated by stablecoin risk analytics firm Range to cost issuers roughly £11.2 million per year for every £1 billion in circulation.

Range CEO Andres Monty warned that the economics could push GBP stablecoin issuers toward Dublin, where EU rules under MiCA (Markets in Crypto Assets) already provide a more commercially viable structure for euro-denominated equivalents. Regional analysis also points to Luxembourg as a further potential destination under the same competitive dynamic.

The increase to a 70% gilt-backing requirement tightens reserve quality but gives issuers more flexibility in the remaining 30%. Analysts have suggested this shift could improve the return profile enough to make UK issuance commercially viable, though that conclusion remains forward-looking and subject to market conditions.

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Industry reaction to the final document was positive but measured. While the removal of individual holding caps was broadly welcomed, some participants said the changes "fell short of enabling an internationally competitive sector" (per CNA/Reuters, June 2026), with concerns focused on whether the aggregate cap could constrain growth relative to dollar stablecoins operating under the currently less prescriptive US framework, which is itself still under active legislative development as of mid-2026.

The global stablecoin market currently sits at approximately $310 billion in total supply, according to DefiLlama data, with Tether's USDT accounting for roughly $185 billion and Circle's USDC for around $75 billion. Sterling stablecoins hold a negligible share, meaning the £40 billion cap is aspirational rather than restrictive for now.

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The practical stakes are highest for communities in South Asia and Sub-Saharan Africa who receive remittances from the UK. The UK-Pakistan and UK-Nigeria corridors are among the world's highest-value remittance routes globally, and senders currently pay fees of 6 to 8% through traditional banking rails. Stablecoin transfers on those same corridors typically cost 1.5 to 2.5%. Those flows almost exclusively use USDT or USDC, meaning recipients absorb the currency risk of a GBP-to-USD conversion before receiving value.

A regulated sterling stablecoin would remove that intermediate step entirely. Nigeria processed an estimated $26 billion in stablecoin transaction volume in 2024, and USDC usage in the country rose 412% year-over-year in 2025, indicating a user base already comfortable with the technology. Nigeria is also exploring eNaira-SWIFT corridor integration for the UK remittance route, with a target completion date of Q3 2026, reflecting an active regulatory posture on digital currency infrastructure. Pakistan launched a regulatory sandbox for stablecoin remittance providers in late 2025, with three firms in active pilots, creating a potential alignment window with the UK's own 2026 finalisation timeline.

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The authorisations gateway for UK crypto firms opens on 30 September 2026 under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. Firms that cross the systemic threshold will need BoE authorisation on top of FCA approval. Sasha Mills, BoE Executive Director for Financial Market Infrastructure, has said the Bank expects to begin accepting issuer applications before the end of this year, describing regulated sterling stablecoins as "a new form of money," with the first products targeting a 2027 market launch.

BoE Governor Andrew Bailey has separately flagged potential friction with US regulators over divergent oversight standards, a tension that may shape how UK rules evolve once the consultation period closes in September.