The Bank of England has published a policy statement and draft Code of Practice for systemic stablecoin issuers in the UK.
The publication, released on 22 June 2026, follows a public consultation carried out in 2025 and reflects targeted revisions based on industry feedback.
The framework is designed to support the development of stablecoins as regulated forms of digital money within the UK, while maintaining financial stability. According to the Bank, stablecoins have the potential to enable faster, cheaper, and more flexible services for users, including cross-border payment use cases and new programmable financial functionality.
Key regulatory decisions
The Bank has revised two areas of its earlier proposals. On backing assets, the maximum share that systemic stablecoin issuers may hold in interest-bearing assets, specifically short-term UK government debt, has been raised from 60% to 70%. The remaining portion must be held in central bank deposits, which the Bank states enables issuers to meet redemptions promptly. In addition, the adjustment is intended to support more viable business models while preserving the capacity to manage outflows effectively.
On issuance limits, the Bank has moved away from the temporary holding limits it had previously consulted on. Instead, a temporary issuance guardrail will apply to each systemic stablecoin, initially set at GBP 40 billion. Furthermore, the Bank states this approach delivers the same policy outcome while being less costly and simpler to implement. The guardrail places no restrictions on use by households or businesses and will be reviewed regularly. It will be removed once risks to credit provision have been addressed.
Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, described the publication as a significant step forward in delivering greater choice and innovation in UK payments. Breeden noted that the framework lays the foundations of trust for a new form of money, incorporating prompt redemption, strong protections, and central bank support.
In an comment in response to Bank of England stablecoin announcement, Kristaps Zips, UK CEO at payabl. said `Today's announcement is a meaningful step forward for the UK payments sector. Removing the proposed caps on individual stablecoin holdings and shifting instead to a £40 billion issuance limit per issuer gives UK businesses room to build with confidence. It signals that the Bank of England wants stablecoins to find a real role in the economy, not sit in a regulatory holding pen.
Stablecoins are a credible alternative to existing cross‑border rails. They can settle faster, cost less and remove much of the friction businesses currently absorb when transacting between markets. They are not going to replace cards, A2A or correspondent banking any time soon, and they don't need to. Their value is in giving businesses and their customers more choice, and giving treasury teams an alternative option when speed actually matters.
We see the demand already. payabl. settles merchants in USDC and other leading stablecoins today, and offers crypto acceptance at checkout with instant conversion to fiat. As the regime evolves, the job for regulators and payment providers is to keep moving in step, so the guardrails protect businesses and consumers without slowing down the innovation this announcement is designed to unlock.`
FCA coordination and next steps
The Bank is working closely with the Financial Conduct Authority (FCA) to deliver a joined-up regulatory regime, including a managed transition pathway for firms scaling from non-systemic to systemic status. Additional details will be published alongside the FCA's forthcoming final rules.
The consultation period for the draft Code of Practice closes on 22 September 2026. Subject to the responses received, the Bank intends to finalise the Code by the end of 2026. This would allow regulated stablecoins to operate in the UK from 2027.
