The Bank of England on June 22 set out revised policy positions for sterling-denominated systemic stablecoins, replacing proposed limits on individual and business holdings with a temporary £40 billion issuance guardrail for each systemic stablecoin product.
The change removes a proposed £20,000 cap for individuals and £10 million cap for businesses. Instead of restricting how much any user can hold or transact, the Bank plans to constrain aggregate issuance while the financial system adapts to a new form of money. The measure applies to stablecoins recognised as systemic by HM Treasury, rather than every sterling stablecoin in the market.
The Bank also revised the required composition of backing assets. In steady state, systemic issuers would hold 30% of backing assets as unremunerated deposits at the Bank of England and may hold the remaining 70% in short-term UK government debt with no more than six months to maturity. Its November 2025 consultation had proposed a 40% central-bank deposit requirement and a 60% government-debt allocation.
Issuer-level control replaces wallet-level restrictions
The policy shift materially changes the compliance architecture facing issuers, wallets and payment platforms. Per-user holding limits would have required providers across the payment chain to identify aggregate positions, account for business exemptions and prevent users from circumventing limits across multiple wallets. An issuance guardrail places the primary control with the issuer and measures the total supply of each product.
The Bank said the £40 billion guardrail is intended as a transitional measure to reduce the risk that a rapid move from commercial-bank deposits into stablecoins could constrain credit provision. It described the guardrail as temporary, not a permanent ceiling on the market.
For payment service providers, removing wallet-level limits reduces one potential source of friction for merchant settlement, treasury use and high-value transfers. It does not remove customer due-diligence, sanctions, safeguarding or transaction-monitoring obligations. Nor does it place a systemic stablecoin outside Financial Conduct Authority oversight: the Bank said systemic issuers will be regulated jointly by the Bank and the FCA once recognised by HM Treasury.
Reserve economics become less restrictive
Lowering the central-bank deposit share from 40% to 30% gives issuers a larger allocation to interest-bearing short-term government debt. The Bank said the revised calibration reflects historical liquidity stress while preserving a central-bank liquidity anchor. Deposits held at the central bank would remain unremunerated because the Bank views systemic stablecoins as payment instruments rather than stores of value used in monetary-policy transmission.
Commercial-bank deposits would not qualify as backing assets under the framework. The Bank cited financial, operational and contagion risks, including the possibility of linking a systemic stablecoin’s resilience to safeguarding banks. Issuers would be required to maintain one-to-one backing and manage liquidity so redemption requests can be processed in real time or by the end of the day after required checks and receipt of the coins.
The policy maintains a prohibition on issuers paying interest or income merely for holding a systemic stablecoin. Activity-based rewards tied to payments, such as merchant rebates or transaction-linked incentives, would be permitted. That distinction leaves room for payments-oriented loyalty models while seeking to prevent systemic stablecoins from competing for deposits chiefly through passive yield.
A draft rulebook still has to be completed
The June 22 publication includes a draft Code of Practice implementing the Bank’s policy positions. The Bank said it intends to finalise the code by the end of 2026, after which it will apply to recognised systemic stablecoin issuers. It also plans a joint publication with the FCA on how firms will move between the FCA-only and joint Bank-FCA parts of the regime.
The immediate significance for the payments industry is therefore regulatory direction rather than a live licence or newly authorised product. Firms designing sterling settlement products can now plan around issuer-level issuance controls and a 70/30 backing mix, but the draft code, recognition process and coordination between regulators remain necessary before a systemic stablecoin can operate under the completed framework.