Bank of England Eases Stablecoin Plan With £40B Issuance Guardrail

The Bank of England has eased its proposed stablecoin framework, scrapping individual holding caps in favor of a £40 billion issuance limit for each coin. The central bank will also allow stablecoin issuers to hold more of their reserves in government debt.

The shift matters because it changes how the U.K. would constrain large stablecoins if they become widely used. Instead of limiting how much individual users can hold, the revised approach focuses on the overall size of each coin, setting a system-level guardrail rather than a user-level cap.

For stablecoin companies, the reserve change is also significant. Allowing more backing assets to be held in government debt could give issuers greater flexibility in how they manage reserves, while still keeping the discussion centered on regulated, liquid assets.

The update suggests the Bank of England is refining its approach as it balances stablecoin growth with financial stability concerns. It also gives crypto firms and payments companies a clearer signal about the type of limits regulators may prefer as stablecoin rules develop.

The proposal remains a regulatory development rather than a market call. Its impact will depend on how the final framework is implemented and how issuers respond to the new issuance guardrail.