Bank of England Introduces Regulatory Framework for Systemic Sterling Stablecoins

The Bank of England has unveiled a new regulatory regime targeting sterling-denominated stablecoins deemed systemic by HM Treasury. The framework aims to stabilize large-scale use of these digital assets in UK payments, with individual holdings capped at £20,000 and business limits set at £10 million.

Prudential oversight falls to the Bank of England, while the Financial Conduct Authority will monitor consumer protection. This bifurcated approach excludes non-sterling stablecoins like Tether and USD Coin, which remain under existing FCA supervision. The move signals Britain's push to modernize payment infrastructure without compromising financial stability.

Liquidity requirements and reserve management FORM the cornerstone of the proposal. By aligning digital currency oversight with traditional payment systems, regulators seek to foster innovation while maintaining public trust. The consultation period offers market participants an opportunity to shape the final implementation.