The Bank of England has just thrown down the gauntlet to the cryptocurrency market. On Monday, a consultation document was published on the regulatory regime for “systemic” stablecoins denominated in pounds sterling (GBP) and a potential digital pound. The UK wants to modernize payments, but on its own terms.
Who will be covered by the regulations? The Bank of England explains
The new regulations will only affect GBP stablecoins recognized by the Treasury as systemic and used on a large scale in British payments. The Bank of England will oversee financial stability, and the Financial Conduct Authority (FCA) will protect consumers. Importantly, popular USD stablecoins such as USDT or USDC will remain under the supervision of the FCA – they will not fall under the wing of the central bank.
Issuers of systemic stablecoins will be able to hold up to 60% of their reserves in short-term British government bonds. The remaining 40% must go to interest-free accounts at the Bank of England. This is to guarantee liquidity and public trust. Newcomers will receive discounts. Beginning issuers will be allowed to hold up to 95% of their assets in public debt to make it easier to get started.
Limits? Yes, but temporary
This is where it gets interesting. To avoid a mass outflow of bank deposits into digital money, temporary limits have been introduced: PLN 20,000. pounds ($26.3 thousand) for individuals and pounds 10 million ($13.2 million) for companies. The largest entities may receive higher ceilings upon application. The limits will disappear when the risk to traditional lending ceases to be dangerous.
Today’s proposals are a key step towards implementing the UK stablecoin regime next year
– said Sarah Breeden, deputy governor of the Bank of England for financial stability.
She added that the industry is getting the clarity it needs to plan with confidence. The consultations will last until February 10, 2026. The Bank of England and the FCA will publish a joint document next year explaining implementation details. The British focus on innovation, but under control. Will this be enough to compete with more liberal jurisdictions? The adoption of the stablecoin by individual investors will also be quite important – the British were very critical of the introduction of the digital pound (CBDC) in the form of Britcoin. Many may assume that the introduction of a stablecoin by the Bank of England may actually be a quiet implementation of CBDC under the guise of cryptocurrency innovation.
