Bank of England Open to Revising Stablecoin Ownership Caps and Reserve Rules

The Bank of England (BoE) has signalled willingness to revise earlier proposals that would cap ownership of pound‑pegged stablecoins and require a 60:40 reserves split after receiving industry and parliamentary pushback. Deputy Governor Sarah Breeden told a House of Lords committee the BoE is "genuinely open" to alternative measures that meet the same financial‑stability goals. The November 2025 consultation had proposed temporary ownership limits (roughly £10,000–£20,000 for individuals and £10 million for businesses) and that at least 40% of reserves be held as unremunerated central bank deposits with the remainder in short‑term UK gilts. Breeden said the BoE will review whether the 60:40 split is overly conservative and welcomed feedback on other solutions, while defending caps as a transitional tool to manage deposit outflow risks. Industry groups warned caps could hinder UK adoption, push issuance offshore and create operational burdens for issuers. The BoE intends to publish draft rules for consultation in June and aims to finalise regulations by year‑end to align with international frameworks. For traders: the move reduces regulatory tail‑risk for UK‑based pound stablecoins but preserves uncertainty until draft rules are published; potential outcomes include looser reserve mix requirements or alternative liquidity safeguards that would ease operational strain on issuers and affect onshore liquidity and issuance volumes.