Bank of England Sets £40B Ceiling for Systemic Sterling Stablecoins

The Bank of England has refined its stablecoin regulatory framework, removing individual holding limits while imposing a £40 billion issuance cap per systemic sterling stablecoin. The draft policy, open for consultation until September 2026, aims to balance innovation with financial stability risks.

Key changes include allowing interest-bearing assets for reserve backing and eliminating wallet-level restrictions. This shift acknowledges stablecoins' potential as payment infrastructure while preventing destabilizing outflows from traditional banking systems. Implementation is slated for 2027.

The ceiling creates a deliberate growth constraint—sterling stablecoins won't rival the scale of major dollar-pegged tokens like USDT or USDC initially. The Bank retains authority to adjust the framework if deposit migration threatens credit markets.