Finance
BoE will only lift planned stablecoin cap when confident no threat
Published by Global Banking and Finance Review
Posted on October 15, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 15, 2025
2 min readLast updated: January 21, 2026
The BoE will remove stablecoin caps once confident in financial safety. Proposed limits are 10,000 to 20,000 pounds, with exemptions for large businesses.
By Phoebe Seers
LONDON (Reuters) -The Bank of England will only remove proposed caps on the quantity of stablecoins individuals and businesses can hold when it is confident they do not pose a threat to financial stability.
The central bank has taken a tougher stance than many authorities on embracing stablecoins, a type of cryptoasset pegged to fiat currency that has soared in popularity.
The crypto industry has opposed the planned caps, but BoE Deputy Governor Sarah Breeden reiterated on Wednesday they were needed because of the potential impact of significant and rapid outflows of bank deposits into stablecoins.
Such outflows, she said in a speech, could lead to a "precipitous drop in credit for businesses and households if the banking system were unable to increase, at scale and at pace, its use of wholesale financing from non-banks".
The BoE has previously indicated it could apply limits of 10,000 pounds to 20,000 pounds ($26,778) for individuals, and higher levels for businesses, marking it out from other major countries which do not have limits.
It is due to publish a consultation setting out updated proposals for a future regulatory regime next month. This will seek views on proposed levels for stablecoin limits.
Breeden said the BoE would expect to remove the limits "once we see that the transition no longer threatens the provision of finance to the real economy".
The largest businesses would likely be exempted from the cap so that they could hold more if required, Breeden said.
Under Britain's proposed regulatory framework, the BoE would only regulate systemic sterling stablecoins, or those deemed capable of becoming widely used for payments, while the Financial Conduct Authority, which has proposed a less stringent regime, would regulate the remainder.
The BoE is also working with the Treasury to introduce a resolution regime for stablecoins, so that where an issuer fails, there is continuity of services for coinholders.
Breeden rejected suggestions that Britain has been slow to regulate cryptocurrencies, saying it expects to finalise its regulatory framework next year, in line with U.S. targets.
($1 = 0.7469 pounds)
(Reporting by Phoebe Seers; Editing by Tommy Reggiori Wilkes and Alexander Smith)
A stablecoin is a type of cryptocurrency that is pegged to a stable asset, like a fiat currency, to minimize price volatility and provide a reliable medium of exchange.
Financial stability refers to a condition where the financial system operates effectively, allowing for the smooth functioning of financial markets and institutions without significant disruptions.
The Bank of England is the central bank of the UK, responsible for maintaining monetary stability, regulating financial institutions, and overseeing the country's monetary policy.
A regulatory framework is a set of rules and guidelines established by authorities to govern the operations of financial institutions and markets, ensuring compliance and stability.
Wholesale financing refers to the process of raising large amounts of capital, typically by financial institutions, to fund operations or investments, often involving significant sums.
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