The Bank of England (BOE) has unveiled a consultation paper today, November 10, 2025, outlining a proposed regulatory framework for systemic stablecoins, digital assets expected to be widely used for payments.
Under the plan, the BOE would impose temporary holding caps of £20,000 for individuals and £10 million for businesses, aimed at preventing large-scale outflows from traditional banks into stablecoins. Deputy Governor Sarah Breeden stated that these limits reflect the UK’s reliance on a bank-dependent mortgage market, and would be lifted once regulators determine that the risk to financial stability has subsided.
The consultation also proposes that systemic stablecoins hold 40% of their reserves in unremunerated deposits at the BOE, with the remaining 60% in short-term UK government bonds. This structure is designed to maintain strong liquidity while ensuring that issuers have direct exposure to safe assets.
However, the plan has already drawn pushback from the crypto industry. Critics argue that the proposed caps could stifle innovation, weaken UK competitiveness, and prove difficult to enforce for non-exempt traders and retail participants. Some large crypto exchanges and institutional investors are expected to receive exemptions.
The Financial Conduct Authority (FCA) will oversee non-systemic stablecoins under the broader digital asset regime, while the BOE focuses on those considered vital to the UK’s payments infrastructure. London’s move aligns with the government’s commitment to keep pace with U.S. regulation, as both jurisdictions race to define clear frameworks for stablecoin adoption and usage in mainstream finance.
