According to Reuters, the central bank has now opted for a simpler model built around a temporary £40 billion issuance cap per stablecoin. The Bank has also eased the proposed reserve mix, allowing issuers to hold up to 70% of backing assets in short-term government debt, with the balance held as non-interest-bearing deposits at the central bank.
Why The Rule Shift MattersThe stablecoin market is still dominated by dollar-denominated tokens, but the UK has been trying to position itself as a more credible jurisdiction for digital payments, tokenisation and market infrastructure. A workable sterling stablecoin framework would give regulated firms clearer rules for issuing payment tokens that can be used in real settlement activity.
What Comes NextThe timeline still matters. The revised framework is part of the Bank’s policy and rulemaking process, with final rules expected before regulated operations begin. That means any article framing this as an immediate opening of the UK stablecoin market would go too far.
Still, the direction of travel is notable. The UK has been under pressure to keep pace with the US and EU on digital asset regulation. A more flexible systemic stablecoin regime could make the country more attractive for firms building tokenised payment rails, provided the final rulebook does not reintroduce too much friction.
The market impact is likely to be more structural than immediate. Sterling stablecoins remain tiny compared with dollar-backed alternatives, but clearer rules could help banks and payment firms test products that were difficult to justify under a stricter holding-limit model.
