When the Bank of England first sketched out how it would regulate stablecoins, the industry read the draft and recoiled. Caps on how much any one person could hold, conservative rules on what the coins could be backed by: critics said the regime would make real-world use almost impossible and send, in the words of one group, a terrible signal about whether Britain wanted the business at all.
The most visible retreat is on holding limits. The Bank had proposed capping individual holdings of any systemic sterling stablecoin at around £20,000, with a £10mn limit for businesses, a mechanism meant to stop money rushing out of bank deposits and into tokens fast enough to choke off lending to the real economy.
That per-person cap is gone. In its place the Bank will apply a temporary issuance limit to each systemic stablecoin, a ceiling on how much a single issuer can put into circulation rather than a tally kept on every wallet.
The reserve rules have softened too. The original plan leaned toward requiring issuers to park backing assets as unremunerated deposits at the Bank, an arrangement shaped by the kind of liquidity stress seen in the 2023 bank runs, including the collapse of Silicon Valley Bank.
