Bank of England launches consultation on regulating systemic stablecoins

Published on 10 November 2025

News release

The Bank of England (the Bank) has today published a consultation paper (CP) setting out its proposed regulatory regime for sterling-denominated systemic stablecoins. Such stablecoins are a new type of digital money designed to maintain a stable value and could be used for retail payments and wholesale settlement in the future. This marks a significant step in preparing for a future where new forms of digital money may be widely used for payments alongside existing ones, offering valuable choice for the public.

The proposals build on feedback received to the November 2023 Discussion Paper and reflect the Bank’s role in maintaining public trust in money as innovation in payments accelerates. They set out a regime that’s robust, future-proof, and aligned with the wider National Payments Vision and the Payments Vision Delivery Committee’s strategy to modernise UK retail payments.

The Bank’s regime would not cover stablecoins used as assets for non-systemic purposes, such as the buying and selling of cryptoassets, which is the predominant use of stablecoins today. Those will be supervised by the Financial Conduct Authority (FCA).

Key policy proposals covered in the consultation paper include:

Backing Assets: In response to feedback, systemic stablecoin issuers will be permitted to hold up to 60% of backing assets in short-term UK government debt. For the remaining 40%, the Bank will, as previously proposed, provide issuers unremunerated accounts at the Bank of England, ensuring robust redemption and public confidence, even under stress.

Additionally, those issuers considered systemic at launch, or transitioning from the FCA regime, will initially be able to hold up to 95% of backing assets in short-term UK government debt, to support their viability as they grow.

In a new proposal, we are also considering central bank liquidity arrangements to support systemic stablecoin issuers in times of stress. These arrangements would reinforce financial stability by providing a backstop should systemic issuers be unable to monetise their backing assets in private markets.

Holding Limits: To safeguard continued access to credit as the financial system gradually adapts to new forms of digital money, the Bank is proposing temporary holding limits of £20,000 per coin for individuals and £10 million for businesses (with an exemptions regime to allow the largest businesses to hold more if required). These limits would be removed once the transition no longer poses risks to the provision of finance to the real economy. These limits would not apply to stablecoins used for settling wholesale financial market transactions in the Bank and FCA’s Digital Securities Sandbox.

Additionally, the Bank is today publishing an approach to quantifying the risks to the provision of finance to the economy from potentially significant and rapid outflows of bank deposits into new forms of digital money. This analysis has shaped the proposed holding limits, and the consultation paper also invites feedback on alternative mechanisms for managing these risks.

Sarah Breeden, Deputy Governor for Financial Stability, said:

“Today’s proposals mark a pivotal step towards implementing the UK’s stablecoin regime next year. Our objective remains to support innovation and build trust in this emerging form of money. We’ve listened carefully to feedback and amended our proposals for achieving this, including on how stablecoin issuers interact with the Bank of England. 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.”

Joint Regulation with the FCA
Non systemic stablecoin issuers will be regulated by the FCA. If recognised as systemic by HM Treasury (HMT), they will transition into the Bank’s regime and will be jointly regulated, with the Bank overseeing prudential and financial stability risks, and the FCA continuing to supervise conduct and consumer protection.

The Bank and the FCA will publish a joint approach document in 2026 to clarify how rules will apply in practice and support a smooth transition between regimes.

Next Steps The consultation is open until 10 February 2026. Following this, the Bank will consider feedback before consulting on and then finalising Codes of Practice later in 2026. These will set out the detailed requirements for systemic stablecoins.