On 10 November 2025, the Bank of England (BoE) published a consultation paper and accompanying press release setting out its proposed regulatory regime for sterling-denominated systemic stablecoins. This follows the BoE's November 2023 Discussion Paper, demonstrating the regulator's commitment to creating a robust framework that balances innovation with financial stability.
The BoE regime will specifically cover sterling-denominated systemicstablecoins that could be widely used for retail payments and wholesalesettlement. Importantly, the regime will not cover stablecoins used fornon-systemic purposes, such as the buying and selling of cryptoassets, whichremains the predominant use of stablecoins today and will continue to besupervised by the FCA.
HM Treasury will determine which payment systems using stablecoins andservice providers will be recognised as systemically important. Once designatedas systemic, these entities will be jointly regulated, with the BoE overseeingprudential and financial stability risks whilst the FCA continues to superviseconduct and consumer protection matters.
To support clarity and smooth transitions, the BoE and FCA will publisha joint approach document in 2026 outlining how rules will apply in practiceand how firms will transition between regulatory regimes.
Key Policy Proposals
The consultation paper addresses several critical areas for systemic stablecoin issuers including:
Backing Assets
- The BoE proposes a structured approach to backing assets, requiring systemic stablecoin issuers to hold at least 40% of backing assets as central bank deposits and up to 60% in short-term sterling denominated UK government debt securities.
- Issuers transitioning from the FCA regime or those considered systemic at launch will initially be permitted to hold up to 95% of backing assets in short-term UK government debt to support their viability as they grow.
Holding Limits
- To safeguard continued access to credit as the financial system adapts to new forms of digital money, the BoE proposes temporary holding limits of £20,000 per coin for individuals and £10 million for businesses.
Safeguarding and Location Requirements
- The consultation proposes that backing assets should be held in the UK and on statutory trust for the benefit of coinholders.
- Non-UK based, sterling denominated systemic stablecoin issuers will be required to establish a UK subsidiary. For non-sterling denominated coins that could reach systemic levels of use in the UK, the BoE is considering a deference approach where overseas issuers may be subject to their home jurisdiction's regulatory framework if it delivers equivalent outcomes.
The consultation proposes that backing assets should be held in the UK and on statutory trust for the benefit of coinholders.
Capital, Operational Resilience and Other Requirements
- The consultation addresses capital and reserve requirements using existing international standards as the baseline and proposes that recognised payment system operators should be responsible for assessing all risks along the payment chain that could threaten operations and regulatory compliance.
Additional proposals cover legal claims and redemption rights, requirements for custody and custodial wallet providers, the use of ledgers, and remuneration for coinholders.
Industry Impact and Next Steps
Deputy Governor for Financial Stability Sarah Breeden noted that the proposals represent "a pivotal step towards implementing the UK's stablecoin regime next year" and emphasised the BoE's objective to support innovation and build trust in this emerging form of money.
The consultation is open for comments until 10 February 2026. Following the consultation period, the BoE will consider feedback before consulting on and then finalising Codes of Practice later in 2026, which will set out the detailed requirements for systemic stablecoins.
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