Deputy Governor for Financial Stability Sarah Breeden confirmed the central bank is actively considering changes to stricter elements outlined in its November 2025 consultation paper. Those proposals included temporary holding caps of £20,000 for individuals and £10 million for businesses, plus a requirement for issuers to hold at least 40% of reserves in non-interest-bearing accounts at the Bank.

Industry pushback drives policy shift

The review follows extensive consultation responses that highlighted how the original rules could make sterling stablecoins less competitive. Participants warned that strict caps would limit use cases in payments, tokenized assets, and institutional treasury management.

Sterling-backed stablecoins currently make up less than 0.5% of the global market, which now exceeds $300 billion and remains heavily dominated by dollar-pegged tokens.

Global context and competitiveness

The Bank’s reassessment comes as other major jurisdictions advance their frameworks. The US has moved forward with stablecoin legislation including reserve and disclosure standards, while the EU operates under the established MiCA regime.

UK authorities have consistently expressed the goal of making Britain a leading hub for digital assets. However, initial proposals faced criticism for the risk of pushing innovation and business activity elsewhere if not carefully balanced.

Focus remains on stability

Breeden stressed that any final regime must ensure stablecoins remain at least as safe as existing payment systems. The core goal is protecting financial stability while allowing room for practical use and commercial viability.

Sterling stablecoins could support more efficient domestic and international payments as well as tokenized markets if the regulatory settings are right. The current signals suggest the Bank recognizes both the risks and the opportunities.