The Bank of England has proposed a regulatory framework for sterling-pegged systemic stablecoins. On Monday, the country’s apex financial institution confirmed the development through a press release.
With the latest move, the United Kingdom’s central bank is on the course of establishing a regulatory regime for stablecoins by publishing a consultation paper. As revealed, the proposal covers other digital assets widely used in payment and has the capacity to pose risks to the country’s financial system.
According to the statement, the consultation paper seeks feedback on a proposed framework by February 10, 2026. The regulator stated that it aims to finalize the regulatory regime’s establishment by the second half of 2026.
The proposed guidelines focuses on systemic GDP-pegged stablecoins or others with a wide range of adoption for use cases like retail, corporate, and cross-border payments. Consequently, the Bank of England stated that His Majesty’s Treasury determines which stablecoin payment systems and service providers are deemed systemically important.
After the categorization by the department, these tokens would then come under the central bank’s oversight jurisdiction and the new regime.
Insights into the standard of the proposed stablecoin regulatory framework
Furthermore, the proposal indicated that the Bank of England would require stablecoin issuers to support up to 40% of their liabilities with deposits at the central bank. Also, it will permit the issuers to keep 60% in short-term UK government debt.
Insight into the proposal indicated that the bank aims to set a limit on the amount of stablecoins an individual can hold. Hence, the statement indicated that the BoE seeks to permit individuals to hold only £20,000 ($26,000), while allowing businesses to hold up to £10 million.
However, the central bank indicated its willingness to allow retail establishments that need high balances to apply for exemption. It is worth mentioning that the recent move from the BoE is in line with efforts from regulators across the globe to bring stablecoins under a supervised regime.
This push is not unconnected to the growing relevance of stablecoins and other digital assets in the global financial market.
Around late 2024, the European Union’s Markets in Crypto Assets (MiCA) regulation came into effect and established a market standard for crypto projects in the region. Similarly, in July 2025, the United States of America under President Donald Trump introduced the GENIUS Act that defines stablecoins operations in the country.
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