Bank of England publishes draft rules for systemic stablecoin issuers with a £40bn issuance cap
On 22 June 2026 the Bank of England published a policy statement and draft Code of Practice for sterling systemic stablecoin issuers, dropping proposed individual holding limits in favour of a temporary £40bn cap per issuance. Issuers may hold up to 70% of backing assets in short-term UK government debt, with the remainder in unremunerated central bank deposits.
What happened
The Bank of England published its policy statement and draft Code of Practice for systemic sterling stablecoin issuers on 22 June 2026, alongside a joint document with the Financial Conduct Authority on how the two authorities will divide supervision. The consultation on the draft Code closes on 22 September 2026. Two changes stand out from the November 2025 consultation. First, the Bank raised the permitted share of interest-bearing backing assets (short-dated UK government debt) from 60% to 70%, with the balance held as deposits at the Bank. Second, it abandoned per-person holding limits and instead set a temporary guardrail capping each systemic stablecoin issuance at £40bn, which officials described as cheaper and easier to implement. Deputy Governor Sarah Breeden described the framework as a milestone toward greater choice in UK payments. The regime is designed to allow regulated systemic stablecoins to operate in the UK from 2027.
Why it matters
The backing-asset split is the central economic variable in stablecoin regulation: every percentage point held at the central bank rather than in gilts reduces issuer revenue, and the move from 60% to 70% is an explicit concession that the earlier calibration left too little margin for a viable business. The £40bn per-issuance ceiling substitutes a supply constraint for a demand constraint, which is administratively simpler but caps the scale any single sterling token can reach. The UK approach now sits between the US GENIUS Act, which does not require central bank reserves, and the EU review, which is considering whether to import the UK's central bank deposit requirement. Those differences will determine where large issuers choose to domicile sterling and euro products.
What is not settled
No sterling stablecoin has yet been designated systemic, so the thresholds that trigger the regime and the duration of the £40bn guardrail remain untested.
Institutions in this story
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Bank of England
Central bank
The United Kingdom's central bank, responsible for monetary policy, financial stability and the sterling real-time gross settlement service. On 22 June 2026 it published a policy statement and draft Code of Practice for…
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Financial Conduct Authority
Regulator
The United Kingdom's conduct regulator, created by the Financial Services Act 2012 and operational from 1 April 2013 in place of the Financial Services Authority, independent of government and funded by fees levied on…
On the record
Bank of England publishes draft rules for systemic sterling stablecoins
The Bank of England published a policy statement and draft Code of Practice for issuers of systemic sterling stablecoins, setting a temporary guardrail of £40bn per issuance instead of the individual holding limits it had consulted on. Issuers may hold up to 70% of backing assets in short-term UK government debt, with the remaining 30% in deposits at the Bank; responses are due by 22 September 2026 and regulated stablecoins are expected to operate from 2027.