The Bank of England has signalled it may revise proposed holding limits on systemically important stablecoins following industry criticism.
Speaking before the House of Lords Financial Services Regulation Committee, BOE Deputy Governor stated that the central bank remains `genuinely open to other ways of achieving the objective` of protecting the UK financial system from the risks associated with a rapid shift of deposits from banks into stablecoins. According to Bloomberg, it was also confirmed that an update to the draft stablecoin regulations is expected in June, with final rules targeted for year-end.
Proposed caps and industry concerns
In November 2025, the BOE published a consultation paper proposing that stablecoins deemed systemically important should be subject to temporary holding limits of GBP 20.000 per individual and GBP 10 million per business. The objective was to mitigate the risk of abrupt deposit flight from the banking sector, which remains the primary source of lending to households and businesses in the UK.
The proposals drew criticism from stablecoin issuers and the broader crypto industry, who argued the caps would be difficult to enforce and could suppress development. A central technical difficulty is that once stablecoins trade on secondary markets, tracking individual holdings across wallets becomes operationally complex and, in some cases, may not be feasible. Industry participants have described the administrative burden this would impose as disproportionate.
The draft rules also require issuers to hold at least 40% of backing assets as unremunerated deposits at the central bank, representing a further point of contention.
Regulatory context and international comparison
The BOE's review coincides with a period of regulatory activity in other major jurisdictions. The EU introduced stablecoin rules in mid-2024 under its digital assets framework. In the US, the passage of the GENIUS Act has accelerated adoption among banks and payments companies.
The BOE has noted a structural difference between the UK and US financial systems that informs its cautious approach: UK lending is more heavily reliant on bank deposits than in the US, where capital markets play a more significant role. This makes the UK economy comparatively more exposed to a scenario in which consumer and corporate deposits migrate into stablecoins at scale.
Stablecoin proponents argue that the current caps, if retained, risk placing the UK at a disadvantage relative to jurisdictions that have moved more quickly to establish workable frameworks. The BOE has acknowledged these concerns while maintaining that some safeguard mechanism is necessary during what it describes as a transitional period for the financial system.
The central bank is currently reviewing responses to its November consultation and has indicated it will engage further with the industry before finalising the regulatory framework.
