Bank of England backs down on strict stablecoin holding limits, sets $50 billion issuance cap
The U.K. central bank abandons retail holding limits for a 40-billion-pound aggregate cap and sweetens yield terms for token issuers ahead of a 2027 market launch.
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Summary
- The Bank of England scrapped its plan to cap individual and corporate stablecoin holdings and will instead temporarily limit the total circulation of any single systemic stablecoin to £40 billion.
- Regulators cut the required share of non-interest-bearing central bank deposits backing stablecoins to 30%, allowing issuers to invest up to 70% of reserves in short-term U.K. government debt while still banning interest payments to coin holders.
- The reversal, prompted by industry pushback and a House of Lords committee, is intended to preserve business viability and competitiveness, with the guardrail expected to be phased out as the market matures ahead of full U.K. crypto rules in 2027.
