The Bank of England has published its policy statement on the UK regime for sterling-denominated systemic stablecoin issuers and launched a consultation on a draft Code of Practice that would apply once firms are recognised as systemic by HM Treasury. The package confirms the Bank’s core prudential framework while revising two headline proposals from its 2025 consultation. It lowers the steady-state backing asset requirement to 70% short-term UK government debt and 30% unremunerated Bank of England deposits, from the previously proposed 60/40 split, and replaces proposed individual and business holding limits with a temporary issuance guardrail of GBP 40 billion per systemic stablecoin product. The detailed framework keeps a narrow backing asset set, excluding commercial bank deposits and broader eligible assets, while permitting overnight repo and reverse repo against eligible UK government debt with safeguards to preserve one-to-one backing. It also confirms a capital and reserve regime based on operating expenses, recovery and wind-down costs, plus statutory trusts and safeguarding rules for backing assets and reserves. Coinholders must have a direct legal claim on issuers and be able to redeem at face value in money, with requests processed as soon as practicable and no later than 24 hours after a full redemption request is received. Issuers will not be allowed to suspend redemptions, may not pay interest to coinholders, but may offer payment-linked rewards. The Bank also maintains its expectation that systemic issuers should obtain direct payment system access and confirms a step-up approach for firms recognised as systemic at launch, allowing up to 95% of backing assets in UK government debt as they scale before moving toward the 70/30 end state. The Bank intends to finalise the Code of Practice by the end of 2026. A joint Bank of England and Financial Conduct Authority publication on how the two parts of the UK stablecoin regime will work together is due shortly, and further supporting materials, including details of the proposed Central Bank Liquidity Facility and additional guidance, are expected in 2027.
Bank of England2026-06-22
Bank of England consults on draft systemic stablecoin code, cuts central bank deposit backing to 30% and sets GBP 40 billion issuance guardrail
The Bank of England has set out its policy positions for systemic sterling stablecoins and is consulting on a draft Code of Practice. It cut the steady-state central bank deposit backing requirement to 30% from 40% and replaced proposed holding limits with a temporary GBP 40 billion issuance guardrail per systemic stablecoin product. The framework also confirms direct redemption rights, a 24-hour redemption deadline from receipt of a full request, statutory trusts for reserves and backing assets, and a ban on issuer-paid interest to coinholders.