The Bank of England has proposed a new framework that will let stablecoin issuers invest up to 60% of their reserves in UK government debt, signaling a more accommodative approach to the digital asset market.
The updated proposal replaces a 2023 plan that would have forced issuers to keep all assets in non-interest-bearing accounts at the central bank. The new model requires only 40% of reserves to be held at the BoE, while the rest can earn returns through liquid assets such as Treasury bills.
Deputy Governor Sarah Breeden described the policy as a “pivotal step” in establishing a UK stablecoin regime in 2026, adding that the central bank had “listened carefully to industry feedback.”
Despite this softening, the BoE kept holding caps in place — £20,000 per individual and £10 million per business — though these limits are expected to be temporary.
The central bank also outlined potential liquidity support for large stablecoin issuers during market disruptions, and confirmed that non-systemic stablecoins will remain under the supervision of the Financial Conduct Authority (FCA).
Industry leaders welcomed the direction but called for greater flexibility. Coinbase executive Tom Duff Gordon said the BoE “could have gone further,” suggesting up to 80% allocation to government bonds and more transparency on when caps would be lifted.
The consultation period will remain open until February 10, 2026.
