BoE Temporary Stablecoin Caps to Safeguard UK Lending
Bank of England Deputy Governor Sarah Breeden has introduced temporary stablecoin caps on sterling-based tokens—£10,000–£20,000 for individuals and up to £10 million for businesses—to curb deposit outflows that could undermine lending and destabilise the UK financial system. These stablecoin caps will remain until regulators assess digital currency adoption and its impact on credit supply. A public consultation, planned by end-2025, will gather industry and public feedback on practical implementation, larger-firm exemptions and regulatory parameters. Crypto traders should watch consultation proposals and timelines closely, as outcomes may influence stablecoin liquidity, payment rails and short-term market dynamics.
Neutral
In the short term, imposing stablecoin caps may curb large inflows into stablecoins, potentially reducing liquidity and transaction volumes without affecting their 1:1 peg or causing significant price swings. Over the long term, a clear regulatory framework and public consultation could bolster institutional confidence and support healthy digital currency adoption. Overall, the measure targets systemic stability rather than price action, leading to a neutral market impact for stablecoins.