Bank of England softens stablecoin rules with £40 billion cap
**Bank of England Drops Wallet Limits for Sterling Stablecoins**
The Bank of England has scrapped proposed individual holding limits for systemic sterling stablecoins, replacing them with a temporary £40 billion issuance cap per issuer.
Earlier drafts set £20k caps for individuals and £10 million for businesses — a restriction industry argued would block scale. Now, each issuer faces only an aggregate issuance limit.
Issuers can also hold up to 70% of reserves in short-term UK government debt. The rest remains in non-interest-bearing deposits at the central bank — a balance aimed at keeping both liquidity and yield viable.
The new framework is still in consultation, not a live market launch. Final rules are expected before regulated operations begin.
Dollar-backed stablecoins dominate globally, but the UK aims to build credible infrastructure for digital payments and tokenised settlement. Removing wallet-level caps gives banks, payment firms and crypto companies clearer room to plan.
Read the Bank of England's revised policy via Reuters.
