BoE Proposes GBP Stablecoin Rules with 40% Backing, Caps

The Bank of England has launched a consultation on GBP stablecoin regulation, open until 10 February 2026, aiming to finalize rules by the second half of 2026. Under the proposal, issuers must back each token with at least 40% held as deposits at the BoE and the remainder in short-term UK government bonds. Systemically important GBP stablecoins may hold up to 95% in gilts during their growth phase, reducing to 60% as they mature. The plan also sets individual holding caps of £20,000 per token and a £10 million limit for businesses, with exemptions for major institutions. HM Treasury will grant systemic status, the BoE will set prudential requirements and liquidity facilities, and the FCA will oversee conduct. Non-systemic stablecoins such as USDT and USDC will remain under FCA regulation only. By clarifying stablecoin regulation, the BoE seeks to align UK policy with global peers and give crypto traders greater certainty while balancing innovation with monetary stability.