The Bank of England is seeking public feedback on a proposed framework for regulating stablecoins. The consultation paper, released today (Monday), focuses on sterling-denominated “systemic stablecoins.”

Digital assets meet tradfi in London at the fmls25

These are tokens the central bank said are widely used for payments and may pose risks to financial stability. The BoE has said that such stablecoins could undermine public confidence in money and payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term.

Stablecoin Issuers Face New BoE Limits

Under the proposal, stablecoin issuers would need to back at least 40% of their liabilities with unremunerated deposits at the BoE. The remaining 60% could be held in short-term UK government debt.

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Systemically important issuers could initially hold up to 95% in government debt, with the level reduced to 60% as the stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term grows.

🇬🇧 JUST IN: The UK’s BOE proposes a £20K cap on individual stablecoin holdings and £10M for businesses. pic.twitter.com/85JXOrs5X5

— Cointelegraph (@Cointelegraph) November 10, 2025

Treasury, BoE Oversee Stablecoin Systemic Importance

The paper also sets limits on holdings. Individual users could be restricted to 20,000 pounds per coin, while businesses could hold up to 10 million pounds. Businesses may qualify for exemptions if higher balances are needed for normal operations.

Tim Meggs, Co-Founder and CEO of LO: TECH said the proposals have sparked “scorn and memes” online over the £20,000 stablecoin limit but added that some institutional measures are “sensible.”

“£10 million limits for businesses, exclusions for some wholesalers, and stipulations around the composition of issuers’ treasuries all make sense,” Meggs said.

“However, the issue isn’t with how sensible the proposals are; it’s with the fact that the regulator is so far behind,” he explained. “In a world where the US put stablecoin legislation in place earlier this year, this should already be law in the UK, not just consultation.”

Lord Vaizey, Co-Chair of the Crypto and Digital Assets APPG, welcomed the Bank of England’s stablecoin proposals as “a significant step towards providing the clarity and certainty investors need to set up and scale up in the UK.”

He noted that while exemptions for large retailers and intermediaries are “encouraging,” he remains concerned about caps on individual and business holdings, adding that “the UK must strike the right balance by creating a regime that is both safe and ambitious enough to secure the country’s leadership in the future of digital money.”

His Majesty’s Treasury will determine which stablecoin systems and providers are considered systemically important. Once designated, these entities would be subject to the BoE’s rules and ongoing supervision.

The consultation period runs until February 10, 2026. The central bank expects to finalize the regulatory framework in the second half of the year.

Stablecoins Expected to Play UK Role

Earlier, The Bank of England emphasized that proposed stablecoin holding and transaction limits are temporary. Deputy Governor Sarah Breeden said the measures aim to maintain financial stability while allowing stablecoins to play a role in the UK’s multi-currency payments system.

The central bank highlighted that rapid shifts from bank deposits into stablecoins could destabilize credit for households and businesses, noting that regulated stablecoins are likely to have a role in the UK market over time.