UK Chases US Stablecoin Rules as Bank of England Sets Temporary Caps

Bank of England to unveil stablecoin framework 

The regime will introduce temporary limits of £20,000 ($26,100) on individual holdings and £10mn on businesses, aimed at preventing large outflows from bank deposits into digital assets. Those caps will remain in place until regulators determine that stablecoins no longer pose a threat to the banking system or mortgage funding. 

Breeden said Britain’s reliance on commercial-bank mortgage lending justified a slower rollout than the US, where government-backed lenders Fannie Mae and Freddie Mac underpin the housing market. 

But her tone underscored a familiar dynamic: the UK once again following the American lead rather than setting its own. 

Political caution replaces ambition 

Washington’s GENIUS Act, signed in July, has already established a full licensing and reserve regime for ‘permitted payment stablecoins.’ Its clear objectives to normalise digital-asset use and reinforce the dollar's global dominance contrast with the BoE’s risk-averse stance, which emphasises prudential stability over innovation. 

That caution also contrasts with political rhetoric from only a few years ago. In 2022, then-Chancellor Rishi Sunak declared his ambition to make the UK ‘a global hub for crypto-asset technology and investment.’ The Conservatives are now out of power, and Prime Minister Keir Starmer's Labour government has yet to echo that enthusiasm or outline its own digital-asset strategy. 

“I take the point about limits, but I honestly think it is less of an issue in practice than people might think,” Breeden said, adding that alignment with the US was “really important” for market confidence. 

The new rules, expected to take effect by late 2026, form part of a broader joint effort by the Treasury and the Financial Conduct Authority (FCA) to give the City of London a foothold in the post-MiCA race for regulatory relevance. Yet analysts say the US is already shaping the global stablecoin playbook, leaving Britain to retrofit its system once again.