Bank Of England Launches Policy Statement And Draft Rules On Regulating Systemic Stablecoins

The Bank of England has today published its policy statement and draft Code of Practice (rules) for systemic stablecoin issuers, marking a key milestone in establishing the UK’s stablecoin regime. The framework supports safe innovation, enabling UK issued stablecoins to develop as trusted forms of digital money.

Alongside other innovations in money and payments, stablecoins could enable faster, cheaper and more flexible services for users, including cross‑border use cases, while supporting new programmable functionality.

Today’s policy statement and draft rules reflect feedback from last year’s consultation. It provides coin issuers with clarity to innovate and scale within a framework that maintains resilience, confidence and trust in money.

The Bank and the Financial Conduct Authority (FCA) are working closely to deliver an end-to-end regime, including a managed transition as firms grow from non-systemic to systemic. Further detail will be published alongside the FCA’s final rules shortly.

Key policy decisions

Following extensive engagement with industry and stakeholders, the Bank has made targeted revisions to the proposals consulted on last year. These include:

• Backing assets: The maximum share held in interest‑bearing assets (short-term UK government debt) has been increased from 60% to 70%, with the remainder in central bank deposits. These deposits enable issuers to meet redemptions promptly. The change supports more viable business models while still allowing issuers to deal with outflows.
• Temporary issuance guardrails: The Bank will safeguard the economy’s access to credit without introducing the temporary holding limits it consulted on last year. Instead, a temporary issuance guardrail will apply to each systemic stablecoin, initially set at £40 billion. This delivers the same policy outcome, while being cheaper and easier to implement, and allowing unrestricted use by household and businesses. This guardrail will be reviewed regularly and removed once risks to credit provision have been addressed.

Sarah Breeden, Deputy Governor for Financial Stability, said:

“This is a major milestone in delivering greater choice and innovation in UK payments. Innovation thrives on trust. And today we’ve set out the foundations of that trust for a new form of money - with prompt redemption, strong protections and central bank support. This is truly a world leading regime.”

Next steps

Subject to feedback by 22 September 2026, the Bank intends to finalise the Code of Practice by the end of 2026. Further supporting materials will follow alongside continued joint work with the FCA.

This allow regulated stablecoins to operate in the UK from 2027.

Background

1. Policy statement “Sterling-denominated systemic stablecoins” 22 June 2026
2. Proposed regulatory regime for sterling-denominated systemic stablecoins | Bank of England November 2025
3. The announcement today is aligned with the Government’s National Payments Vision set out in 2024. 
4. HM Treasury decides whether to recognise a payment system as systemic, based on criteria set out in the Banking Act 2009, including whether weaknesses in its design, or disruptions to its operation, could threaten the stability, undermine confidence in, the UK financial system, or have serious consequences for businesses or other interests across the UK.
5. The Bank’s regime will not cover stablecoins used for non-systemic purposes, such as the buying and selling of cryptoassets, which is the predominant use of stablecoins today. Those will be supervised solely by the FCA.
6. Financial Stability Paper on “The role of holding limits for sterling-denominated systemic stablecoins and a potential digital pound“ 10 November 2025.
7. Modernising money and markets − speech by Sarah Breeden 19 May 2026.
8. Talking ’bout next generation − speech by Sarah Breeden 2 February 2026.
9. What are stablecoins and how do they work?