The Bank of England (BOE) is preparing to release its long-awaited regulatory framework for stablecoins, aiming to match the pace of US developments in digital asset oversight, according to Bloomberg.
Key Takeaways:
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The Bank of England will unveil its stablecoin regulatory framework on November 10, aiming to align with US progress.
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The rules will focus on “systemic” stablecoins, while smaller ones fall under the FCA’s lighter regime.
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Temporary holding caps and a dual-tier system aim to safeguard banks while fostering innovation in digital payments.
Deputy Governor Sarah Breeden dismissed suggestions that the UK is trailing behind the U.S., telling Bloomberg that the new regime would become operational “just as quickly as the U.S.”
The BOE will publish its formal consultation on stablecoin regulation on November 10, she confirmed to Reuters.
The proposed rules will initially target “systemic” stablecoins, those expected to play a significant role in payments, while smaller stablecoins will remain under the Financial Conduct Authority (FCA) with a lighter regulatory framework.
This dual approach seeks to balance innovation with financial stability as the use of tokenized money expands.
According to Bloomberg, the BOE’s plan will introduce temporary caps on stablecoin holdings: up to £20,000 ($26,000) for individuals and £10 million for businesses.
Breeden explained that the stricter limits reflect the UK’s bank-dependent mortgage market, which could be vulnerable if deposits shift rapidly into stablecoins.
“Our aim is to make sure that our regime is up and running just as quickly as the U.S.,” Breeden said.
The move comes amid growing pressure for Britain to stay competitive in the race to regulate digital assets.
Last month, the government announced plans to appoint a “digital markets champion” to lead blockchain modernization efforts across wholesale finance.
Meanwhile, the FCA lifted its four-year ban on crypto exchange-traded notes (ETNs), allowing broader access to these products beyond professional investors.
The upcoming framework marks a key step in the UK’s bid to position itself as a leading jurisdiction for responsible crypto innovation and regulatory clarity.
As reported, the UK government plans to appoint a “digital markets champion” to accelerate the nation’s shift toward blockchain-based financial infrastructure, according to remarks by Economic Secretary to the Treasury Lucy Rigby.
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