The Bank of England (BoE) is relaxing the requirement for stablecoin issuers to back their coins with unremunerated central bank deposits and is removing limits on the value individuals and businesses can hold.
Bank of England Eases Stablecoin Backing Rules Ahead of 2027 Code
22 June 2026 - 12:30 CEST
The changes are set out in the BoE's new draft Code of Practice for systemic stablecoin issuers, which will come into force in 2027.
Focus on payments
The UK's stablecoin policy focuses on payments rather than investment. In its statement accompanying the new rules, the BoE said stablecoins "have the potential to make payments faster, cheaper and more efficient and could be used widely for payments in the UK."
That is why they are referred to as systemic: the vision is that they become a critical part of financial infrastructure. It is also why the BoE is keen to ensure the right regulations are in place to protect the financial system as stablecoins are introduced.
Two concessions
The proposed rules incorporate two significant changes following feedback from the BoE's November 2025 consultation paper.
The first is a reduction in the share of backing assets required to be held in unremunerated central bank deposits. In 2023, the BoE sought a 100% requirement, which drew industry opposition. By 2025 it had shifted to a 40:60 split between central bank deposits and short-term UK government debt. That ratio has now moved again, to 30:70.
The second change replaces individual and institutional holding limits, which the consultation found to be unnecessarily restrictive, with a £40bn "temporary issuance guardrail" capping the value of each systemic stablecoin. The BoE says the cap will achieve the same effect of preventing "undue risk for the economy" and will be reviewed regularly.
Next steps
The BoE has asked for feedback on the proposed rules by 22 Sep and will publish further detail alongside the Financial Conduct Authority (FCA) shortly. It aims to finalise the Code of Practice by the end of 2026.
