London (Brussels Morning Newspaper) – The Bank of England announced on Monday that issuers of systemic stablecoins can invest up to 60% of their backing assets in short-term government debt. This is part of a series of proposed regulations for the sector.
Today, the bank released a consultation paper outlining its proposed regulation for systemic stablecoins denominated in sterling.
According to the Bank of England, the proposals are based on feedback from the November 2023 Discussion Paper and highlight the Bank’s role in preserving public trust in money as payment innovations advance.
What are the Bank of England’s new stablecoin rules?
They established a regime that is robust, future-proof, and aligned with the broader National Payments Vision and the Payments Vision Delivery Committee’s strategy to modernise UK retail payments.
The Bank clarified that its regime does not include stablecoins used as assets for non-systemic activities, such as trading crypto assets, which is the main current use of stablecoins. Instead, those will fall under the supervision of the Financial Conduct Authority (FCA).
The bank stated that, in response to feedback, systemic stablecoin issuers will be allowed to hold up to 60% of backing assets in short-term UK government debt regarding backing assets.
Regarding holding limits, the bank stated that to ensure ongoing access to credit as the financial system transitions to new digital forms of money, it proposes temporary holding limits of £20,000 per coin for individuals and £10 million for businesses, with an exemptions regime permitting larger holdings for the biggest businesses if necessary.
Stablecoins in Europe play a significant and evolving role primarily shaped by the Markets in Crypto-Assets Regulation (MiCA), which became fully applicable in December 2024 and governs stablecoin issuance and use across the EU in 2025.
What are the European Union’s rules on stablecoins?
The European Union regulates stablecoins mainly through MiCA. This regulation took full effect between 2024 and 2025. MiCA creates the first legal framework for crypto-assets, including stablecoins. Its goal is to ensure consumer protection, financial stability, and transparency in the European crypto market.
In the EU, stablecoin issuers must get permission from a national competent authority before they can issue or list their tokens. This requirement also applies to non-EU issuers, who must set up a legal entity in the EU.
