Bank of England Sets £40B Stablecoin Issuance Guardrail
The Bank of England published draft systemic stablecoin rules, replacing planned holding limits with a £40 billion issuance guardrail.
The Bank of England has softened its proposed systemic stablecoin framework, giving issuers more room to scale while keeping a hard guardrail on overall issuance.
What Happened
On June 22, 2026, the Bank of England published its policy statement and draft Code of Practice for systemic stablecoin issuers. The central change is a temporary £40 billion issuance guardrail for each systemic stablecoin, replacing the household and business holding limits consulted on last year.
The Bank also increased the maximum share of backing assets that can sit in interest-bearing short-term UK government debt from 60% to 70%. The remainder must be held in central bank deposits so issuers can meet redemptions promptly.
Why It Matters
The decision moves the UK closer to a workable stablecoin regime without forcing users into balance caps. For issuers, the 70% backing-asset allowance makes the model more commercially viable than a framework dominated by non-interest-bearing deposits.
For markets, the signal is regulatory pragmatism. The Bank is still prioritizing resilience, redemption confidence, and credit-system safeguards, but it is leaving more room for payment-focused stablecoins to develop inside the UK framework.
What to Watch
Feedback is due by September 22, 2026. The Bank intends to finalize the Code of Practice by the end of 2026, with regulated stablecoins expected to operate in the UK from 2027. The Financial Conduct Authority is also due to publish related final rules for the broader stablecoin regime.
Key Takeaways
The UK stablecoin race now has a clearer regulatory shape. The next test is whether issuers view the £40 billion guardrail and backing-asset rules as enough to launch sterling payment tokens at scale.