Bank of England Drafts Rules to Become 'Banker to the Stablecoin' With £40B Issuance Cap

The Bank of England released a draft Code of Practice and policy statement outlining a new regulatory framework for sterling-denominated stablecoins. The updated rules establish a temporary £40 billion issuance guardrail for each stablecoin, officially abandoning earlier proposals that would have capped how much an individual user could hold in their digital wallet. Issuers will be required to hold 30% of their backing assets as deposits directly at the central bank, while the remaining 70% can be held in interest-bearing short-term UK government debt. The Bank of England plans to finish implementing the full regulatory framework by the end of 2026, with stablecoin operations under the new regime slated to begin in 2027. "The central bank will serve as the banker to the stablecoin." — Bank of England Deputy