Among other things, the BofE’s proposals would allow stablecoin issuers under its oversight to hold up to 60% of their reserves in short-term government debt, and up to 95% when they first launch to support their early viability.
The Bank of England’s consultation also proposes adopting temporary investment limits as the financial system adapts to the introduction of these new digital assets. Initially, individual investors would be limited to holding £20,000 per coin, and businesses would generally be restricted to £10 million per coin — limits that would be dropped once policymakers conclude that there’s no risk to credit availability in the real economy.
The Bank of England is also consulting on the adoption of central bank liquidity arrangements to support systemic stablecoin issuers in times of market stress, when private markets may not be accessible.
“Today’s proposals mark a pivotal step towards implementing the U.K.’s stablecoin regime next year,” said Sarah Breeden, deputy governor for financial stability at the BofE, in a release.
“Our objective remains to support innovation and build trust in this emerging form of money,” she added. “These proposals are fit for a future where stablecoins play a meaningful role in payments, giving the industry the clarity it needs to plan with confidence.”
Canada, too, is considering its next moves on stablecoin, with the federal government signalling its intention to regulate stablecoins in Canada in last week’s budget. The budget set out the government’s plan for legislation that will set standards for ensuring adequate asset reserves, redemption policies, risk management, and cybersecurity in the fledgling stablecoin sector — under the oversight of the Bank of Canada.
The Bank of England’s consultation runs until Feb. 10, 2026.
The central bank plans to finalize its stablecoin rules in 2026, and also aims to publish a joint paper with the FCA next year too, which will clarify how their regimes are expected to interact, and to facilitate a smooth transition between them.