Overview
- The Bank of England published a policy position on Monday, June 22, 2026 that drops proposed per-user holding caps and instead sets a temporary issuance guardrail of £40 billion for each sterling ‘systemic’ stablecoin.
- The draft eases backing rules so issuers may hold up to 70% of reserves in short-term UK government debt while keeping at least 30% in non‑interest-bearing deposits at the Bank of England to ensure quick access for redemptions.
- The framework preserves consumer protections by requiring prompt redemption at par, banning direct interest or dividend payments to holders, and allowing only activity-based rewards such as cashback or loyalty tokens.
- The BoE will co‑ordinate supervision with the Financial Conduct Authority, is seeking feedback until September 22, 2026, and aims to finalise the Code of Practice by end‑2026 with regulated systemic activity possible from 2027.
- Industry reaction is mixed: firms welcomed the easing as necessary for commercial viability but warned the regime could still leave sterling stablecoins less competitive internationally and that uncertainty remains over how long the temporary cap will last.