The Bank of England has eased its proposed regulatory framework for sterling-denominated stablecoins, dropping plans to cap individual holdings and instead imposing a £40 billion issuance limit per stablecoin. The revised rules, targeting a 2027 launch, also loosen reserve asset requirements, signaling a more accommodative stance toward fiat-backed digital currencies in the UK.
The central bank's final policy replaces earlier proposals that would have restricted how much any single user could hold. By shifting to a systemic issuer cap, the BoE aims to prevent concentration risk while allowing stablecoin projects to scale. The changes include updated treatment of backing assets, reflecting industry feedback that prior rules were too restrictive.
Regulatory clarity is emerging globally as the BoE joins the EU's Markets in Crypto-Assets (MiCA) framework and the US's ongoing stablecoin debates. The UK's move could accelerate institutional adoption of sterling-based tokens for payments and settlement, though the 2027 timeline gives issuers time to comply.
In the broader crypto market, the ruling may boost confidence in regulated stablecoins, with total market cap for fiat-backed tokens currently around $150 billion. Bitcoin and ether showed muted reactions, while Solana briefly rallied on a separate partnership announcement with South Korea's Toss Bank.
Critics argue that the £40 billion cap may be too high to prevent systemic risk, while others say it stifles innovation by limiting potential growth. Industry bodies have called for a more proportional approach tied to actual adoption rather than a fixed ceiling.