UK Stablecoin Limits Remain Until Systemic Threats Subside

British regulators keep stablecoin caps firmly in place—no easing until financial stability risks evaporate completely.

The Regulatory Standoff

UK authorities maintain their cautious stance, refusing to lift stablecoin restrictions while systemic dangers linger in the financial ecosystem. The caps stay locked—no exceptions, no compromises.

Risk Management Priority

Financial watchdogs prioritize systemic safety over innovation speed, keeping artificial constraints on digital pound-pegged assets until the threat matrix clears. Because apparently, traditional finance needs protection from its own evolution—how quaint.

Market Impact Assessment

While crypto markets chafe under these limitations, regulators insist the measured approach prevents potential contagion scenarios. Because nothing says financial innovation like maintaining the status quo with extra steps.

The Waiting Game Continues

No timeline exists for restriction removal—just vague promises about 'when conditions permit.' Meanwhile, the global digital asset race accelerates while UK regulators perfect their risk-aversion techniques. Because who needs competitive advantage when you can have bureaucratic comfort?

UK’s cautious stablecoin framework for a still-forming market

The Bank of England’s proposal outlines strict thresholds on how much stablecoin individuals and businesses can hold at any given time. Earlier drafts of the plan suggested limits between £10,000 and £20,000 for individuals, and up to £10 million for corporate entities. The largest firms, however, may be exempted to accommodate operational or settlement needs.

Under Britain’s proposed regulatory framework, the Bank of England WOULD oversee only systemic sterling-denominated stablecoins, including those deemed capable of being widely used for payments or posing a potential threat to financial stability. The Financial Conduct Authority would supervise the rest under a lighter regime.

Parallel to the cap discussion, the BoE is engaged in a critical, though less publicized, effort with the UK Treasury to design a resolution regime for stablecoin issuers. This work focuses on the “what if” scenario of a major stablecoin collapse. The goal is to ensure continuity of services for holders, preventing a disorderly failure from rippling through the financial system.

Meanwhile, Breeden’s firm stance arrives just a week after a Bloomberg report indicated the central bank was preparing to introduce exemptions for certain firms, a MOVE seen as a concession to industry pressure. The UK faces increasing competition from the U.S., where the recent passage of the GENIUS Act has provided a clearer, if still evolving, pathway for dollar-backed stablecoins.