Bank of England publishes draft systemic stablecoin rules with GBP 40 billion issuance guardrail

The Bank of England has published a policy statement and draft Code of Practice for issuers of sterling-denominated systemic stablecoins, setting out the core elements of the United Kingdom’s regime for stablecoins that could become systemic. The package reflects feedback from the Bank’s 2025 consultation and is intended to let firms scale within a framework built around prompt redemption and protections for financial stability. The main policy changes are in reserve composition and growth constraints. Issuers will be allowed to hold up to 70% of backing assets in interest-bearing short-term UK government debt, up from the 60% proposed previously, with the remainder held in central bank deposits to support redemptions. The Bank has also dropped the temporary holding limits consulted on last year and will instead impose a temporary issuance guardrail on each systemic stablecoin, initially set at GBP 40 billion. The Bank said this is meant to protect credit provision while allowing unrestricted use by households and businesses. Stablecoins used for non-systemic purposes, including most cryptoasset trading uses, will remain solely under Financial Conduct Authority supervision. Feedback on the draft Code of Practice is due by 22 September 2026. The Bank intends to finalise the code by the end of 2026, publish further supporting materials alongside continued joint work with the Financial Conduct Authority, and enable regulated stablecoins to operate in the United Kingdom from 2027.