The Bank of England has scrapped its proposed limits on how much stablecoin individuals and businesses can hold, in a major softening of its regulatory stance. The £20,000 individual cap and £10 million business cap are gone, replaced by a temporary £40 billion ($50.6 billion) total issuance cap per systemic stablecoin. The shift comes after sustained industry pushback and a Bank of England admission that earlier plans were “overly conservative”.
Key Takeaways
- The Bank of England drops £20,000 individual and £10M business stablecoin holding caps.
- New temporary cap is £40 billion ($50.6B) on total issuance per systemic stablecoin.
- BoE expects to start accepting applications from systemic stablecoin issuers by year-end.
A Complete U-Turn on Holding Limits
The Bank of England has just scrapped one of its most contested stablecoin proposals. Individual holders will no longer be capped at £20,000 (about $27,000) per stablecoin, and businesses will no longer be limited to £10 million in any single token.
The decision marks the most significant shift in UK stablecoin policy since the consultation phase opened. The Bank of England is moving from a per-holder cap, which the industry called restrictive and unworkable, to a system-wide issuance cap that targets the macro exposure of each individual stablecoin rather than each user’s wallet.
The replacement framework introduces a temporary £40 billion ($50.6 billion) cap on the total issuance of any single systemic stablecoin. The cap applies to the aggregate volume in circulation, not to individuals. It is presented as a transitional tool while the central bank refines its longer-term framework.
The Bank of England has described its approach as treating stablecoins as “a new form of money”. The new structure makes that framing more consistent. Money has units issued by the system, not units rationed at the user level, and the pivot suggests the central bank accepts that a usable digital pound stablecoin must look more like money and less like a controlled deposit.
For users planning to integrate stablecoins into business operations or treasury flows, the practical change is immediate. The £20,000 cap would have forced every meaningful payment flow to bypass UK rails. The new structure removes that hard ceiling and reopens the door to UK-regulated GBP stablecoin use cases.
How the Industry Forced the Change
Sarah Breeden, the Bank of England’s deputy governor for financial stability, had signalled the direction in May when she told the Financial Times that the original plans may have been “overly conservative”. Her acknowledgement came after months of criticism from issuers, exchanges, and even Parliament.
The UK House of Lords committee had publicly called on the Bank of England to reconsider, arguing the proposed limits would push activity overseas and stifle UK innovation. Lawmakers warned that capping stablecoin holdings at $27,000 per individual would make the products unusable for any serious payments or treasury function.
Beyond the holding limits, the Bank of England is also reviewing its plan to require that at least 40% of stablecoin reserves be held with the central bank, earning no interest.That requirement, originally designed to absorb potential bank-run dynamics inspired by the Silicon Valley Bank collapse of 2023, is now considered too punitive for issuers and likely to be reduced in the final framework.
The combined message is clear. The Bank of England wanted a tightly controlled stablecoin regime, the industry pushed back, and the central bank has retreated on the most binding constraints while keeping the structural elements that protect financial stability. Across the Atlantic, the GENIUS Act let US banks issue stablecoins.
The shift also reflects a competitive dimension. UK regulators have repeatedly stated they want a stablecoin regime in place “as quickly as the US”. Maintaining the original caps would have made that promise hollow, because no serious issuer would have prioritised a UK license under those conditions. Regulators are moving on many fronts, with the SEC opening a consultation on innovative ETF rules.
What It Means for Issuers and the UK Position
Without holding caps, stablecoin issuers gain real operational flexibility. Treasury teams, corporates handling cross-border payments, and DeFi protocols using GBP-denominated tokens can now plan around a single aggregate ceiling rather than a tight per-user constraint. This puts the UK closer in spirit to the US approach (an issuance-first regulation), while keeping a UK-specific guardrail through the £40 billion cap.
The Bank of England expects to start accepting applications from would-be systemic stablecoin issuers by the end of 2026. That timetable matters. The framework that emerges over the next six months will determine whether London becomes a competitive issuance hub or simply a passthrough jurisdiction.
State Street already moved to capture institutional demand on the dollar side, as covered in our piece on the SSCXX stablecoin reserve fund. UK banks and asset managers will face the same question soon: position now under the Bank of England regime, or wait until the rules harden in 2027.
For users, the most concrete change is the disappearance of an arbitrary personal cap that would have made GBP stablecoins unusable for anything beyond small retail purchases. The new structure looks more like a regulated payment instrument than a rationed asset, which is the threshold the industry needed for serious adoption.
The £40 billion aggregate cap remains a real constraint. Once a stablecoin reaches that size, growth has to either pause or shift to non-systemic alternatives. But that ceiling is several orders of magnitude beyond where any GBP stablecoin sits today, which gives the market years of headroom before it becomes a binding issue.
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