UK Central Bank Reassesses Stablecoin Regulatory Framework, Proposing Looser Holding Limits and Reserve Requirements

According to Cointelegraph, the Bank of England (BoE) is reassessing its regulatory framework for sterling-backed stablecoins. Previously, in its November 2025 consultation paper, the BoE proposed a cap of £20,000 on individual holdings of any single sterling-backed stablecoin and a cap of approximately $13.5 million for enterprises, while also requiring at least 40% of reserve assets to be held at the central bank in non-interest-bearing form. Industry bodies have widely criticized these proposals as operationally cumbersome, profit-margin-constraining, and potentially detrimental to the competitiveness of UK-based stablecoins in institutional markets. Sarah Breeden, Deputy Governor of the BoE, stated that the central bank is exploring alternative approaches to strike a balance between financial stability and market competitiveness. Currently, sterling-backed stablecoins account for a negligible share of the global stablecoin market—valued at roughly $300 billion—where dollar-pegged tokens continue to dominate.