The Bank of England (BoE) is preparing to unveil a long-awaited consultation on stablecoin regulation on November 10, signaling its intent to keep up with U.S. efforts to establish oversight for digital assets.
According to reports from Bloomberg and Reuters, Deputy Governor Sarah Breeden confirmed that the U.K. is not falling behind its transatlantic counterpart in regulating stablecoins — digital currencies pegged to traditional assets such as the U.S. dollar or British pound. Breeden said the BoE’s framework will become operational “just as quickly as the U.S.”
New Rules for “Systemic” Stablecoins
The upcoming consultation will outline rules primarily for what the BoE considers “systemic” stablecoins — those expected to be widely used for payments and potentially significant to financial stability. Smaller or less prominent stablecoins will continue to fall under the Financial Conduct Authority (FCA), which will oversee them under a lighter-touch regime.
Temporary Caps and Financial Safeguards
In an effort to minimize risks to the U.K.’s bank-based financial system, the proposals reportedly include temporary limits on stablecoin holdings:
- Up to £20,000 ($26,000) for individuals
- Up to £10 million for businesses
Breeden said these caps reflect the BoE’s caution around sudden shifts of deposits from banks into digital assets, particularly given the U.K.’s reliance on traditional mortgage lending.
“Our aim is to make sure that our regime is up and running just as quickly as the U.S.,” she told Bloomberg.
A Push to Stay Competitive
The move comes as the U.K. accelerates efforts to remain competitive in the global digital finance race. In October, the government announced plans to appoint a “digital markets champion” to guide the modernization of wholesale financial markets using blockchain and related technologies.
Meanwhile, the FCA recently lifted its four-year ban on retail access to crypto exchange-traded notes (ETNs), a decision expected to broaden participation in the sector beyond professional investors.
Looking Ahead
The BoE’s forthcoming consultation marks another step in Britain’s effort to balance innovation with financial stability. As policymakers worldwide race to define how stablecoins fit into the broader financial system, the U.K.’s approach could serve as a key test case for responsible crypto regulation in a major global market.
