The Bank of England (BOE) is showing a more welcoming attitude towards stablecoins, signaling a shift in its regulatory approach. However, Deputy Governor Sarah Breeden has highlighted a lack of constructive engagement from the industry, which could impede the development of a balanced regulatory framework.
In November 2025, the BOE released a document outlining its vision for regulating stablecoins, a move that drew criticism from the crypto community for being overly cautious. The document proposed stringent measures, including holding limits of £20,000 for individuals and £10 million for businesses, which industry representatives argued could stifle innovation and growth.
Revisiting the Regulatory Landscape
Over the past few months, the BOE has engaged in discussions with industry groups to refine its stance on stablecoins. These discussions have led to revisions in backing requirements and account limits, reflecting a more flexible approach from the central bank. However, the industry’s feedback has been less constructive than the BOE had hoped, according to Breeden.
“The pressure from the industry to do it in a different way is very real. What we’ve been a bit disappointed with, is nobody said, ‘Why not do it this way?’ Instead, what we’ve had is ‘don’t do this,’ and ‘I understand why you want to do something’ as opposed to filling the gap,” Breeden said before the House of Lords Financial Services Regulation Committee.
Industry Pushback and Engagement
Tom Rhodes, Chief Legal Officer at UK-based stablecoin issuer Agant, believes that the industry has been actively engaging with regulators. “Over the past two years, we have reviewed thousands of pages of consultations from the FCA and the Bank, attended numerous roundtable meetings, and submitted hundreds of pages of input both ourselves and as part of trade associations,” Rhodes told Cointelegraph.
Nick Jones, founder and CEO of UK-based digital assets platform Zumo, echoed similar sentiments. “Industry groups have been working hard, and to tight deadlines, to make tangible recommendations,” he said. Jones suggested that the BOE could adopt the Financial Conduct Authority’s (FCA) Spring model, which involves time-boxed workshops focused on practical applications of the technology.
The Vision of a ‘Multi-Moneyverse’
Breeden opened her remarks with a vision of a future where multiple forms of money coexist. “We do want to see tokenized money issued by non-banks. We can have what I call a ‘multi-moneyverse’ with greater choice and competition today,” she said. This vision aligns with the crypto industry’s argument that stablecoins can enhance financial innovation and competition.
Looking Forward
The BOE expects to finalize its stablecoin regulations by the second half of 2026. However, the industry is pushing for the removal of holding caps and a reconsideration of bank-like capital rules for issuers. Jones noted that these rules are inappropriate for fully-backed issuers and should be replaced with oversight focused on reserve quality and transparency.
“The UK can be one of the leaders in stablecoins, but only if regulation is proportionate and competitive,” Jones concluded. As the BOE continues to refine its regulatory approach, the industry’s active and constructive engagement will be crucial in shaping a regulatory environment that fosters innovation while maintaining financial stability.
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