Key takeaways:

• BoE proposes £20k cap on individual holdings of stablecoins

• Stablecoin issuers required to back assets with UK gov. debt

• Is this a handicap on stablecoins ahead of the UK's CBDC?

The Bank of England published a consultation paper on the 10th of November setting out its proposed "regulatory regime" for "sterling-denominated systemic stablecoins" that they hope to finalise in 2026.

Aside for an individual £20,000 holding limit for individuals, stablecoin issuers will be required to "to hold up to 60% of backing assets in short-term UK government debt" and at least 40% deposited in unremunerated BoE accounts.

What does this mean?

The BoE would hold a large share of stablecoin reserves either deposited in unremunerated accounts or short-term government debt effectively forming a centralised, government-supervised digital pound.

Similarly the United States passed the GENIUS Act in June 2025 which requires stablecoins to be backed "on a 1:1 basis by US dollars or other approved high-quality liquid assets" according to Coin Telegraph.

The BoE is also developing its own central band digital currency (CBDC) and as of press time currently in its 'design' phase.

Private stablecoins may be seen as a threat to the BoE's control over money supply and may undermine a CBDC if left unregulated.