Bank of England Deputy Governor Sarah Breeden affirms the UK’s commitment to swiftly align stablecoin rules with the US, proposing temporary holding limits to manage financial risk.
The Bank of England (BoE) is taking proactive steps to finalize its stablecoin regulatory framework. According to Bloomberg, BoE Deputy Governor Sarah Breeden said recently that new rules would be in force, and no later than the US regime. This great reassurance is also to calm increasing fears that Britain was lagging behind its great world rivals. The move is an important step towards integrating stablecoins safely into the regulated UK financial system.
BoE Proposes Temporary Holding Limits to Manage Risk
One of the main pillars of the BoE’s proposed framework is the implementation of temporary restrictions on holding stablecoins. In particular, a limit of GBP20,000 is contemplated for individuals and a limit of GBP10 million for all businesses. These caps are meant as a transition strategy for the market. They are meant to block massive funds inflows and therefore reduce the potential for liquidity risks to commercial banks.
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Breeden drew an institutional distinction between the financial systems of the two nations. She explained that the UK mortgage market is very dependent on commercial bank lending. Therefore, the UK is now much more cautious about making the switch to a new digital money system, which is why. This is a main reason why temporary holding limits might be ordered.
The BoE is working actively with the US authorities. It has been emphasized that it is of utmost importance that stablecoin regulations are coordinated between the UK and US. This critical alignment is to ensure internationalization of digital asset management across the fast-changing digital asset landscape. Moreover, synchronized rules are the key to stabilizing the global financial system in the long term.
Bank of England to Hold Public Consultation on Stablecoin Rules in November 2025
In order to ensure that the new framework is appropriate and effective, the central bank will conduct a public consultation on the new framework in November 2025, during which industry participants will have a chance to submit valuable feedback on the proposed limits and the implementation path. It is important to note that this important consultation process will influence the final rules.
The UK’s framework is also likely to be compatible with US requirements in respect to reserve assets. Stablecoin issuers will probably need to hold high-quality government bonds as reserve. This requirement directly guarantees price stability and reliability of the digital assets. Further details are being developed regarding asset backing requirements.
For now, the Bank of England expects to conclude and implement the new stablecoin rules by the end of 2026. The approach of the central bank is directly targeted to industry concerns about possible delays.
Ultimately, the whole transition is aimed at building confidence and enhancing the competitiveness of the UK in the global digital asset economy. This deliberate, but swift, approach is designed to achieve maximum clarity and safety for all market participants.
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