After digital asset firms voiced concerns that the BoE’s planned regulations for pound sterling stablecoins, such as holding limits and reserve requirements, might limit uptake and render UK-issued tokens economically unfeasible, the bank is reevaluating several aspects of the plan.
Deputy Governor Sarah Breeden informed the Financial Times that the Bank of England is considering alternate solutions to the current temporary limits on the number of stablecoins that individuals and businesses can possess. Additionally, the bank is considering whether its current requirement that a minimum of 40% of backing assets be kept as non-interest-bearing deposits is excessively cautious.
Britain Aims to Strengthen Its Position
The UK government and regulators are attempting to establish Britain as a leading center for digital assets, which has prompted this reevaluation, all the while keeping the financing of banks and financial stability in mind. The worldwide stablecoin market is worth over $300 billion, with dollar-based issuers still dominating the market. At present, tokens tied to sterling make up a negligible portion of this market.
In a consultation document released in November 2025, the Bank of England elaborated on ideas presented in a 2023 discussion paper about a potential regulatory framework for systemic stablecoins denominated in sterling and laid out specific ownership restrictions.
While enterprises would be limited to around $13.5 million, individuals would be permitted to keep up to 20,000 pounds (about $27,000) of any one UK stablecoin, at least during the first transition period, according to that plan.
In the event of a massive stablecoin’s quick adoption as a payment method, the central bank claimed that restrictions were necessary to prevent a flood of deposits from traditional banks into emerging “tokenized” currencies.
Opponents of the limitations, including industry organizations and potential issuers, said that they were inefficient, difficult to monitor across platforms, and may discourage large-scale institutional investment in regulated UK stablecoins for use in areas such as corporate treasury, payroll, and settlement.