Home / Business and Economy / UK Regulator Imposes Strict Stablecoin Holding Limits to Safeguard Banks
UK Regulator Imposes Strict Stablecoin Holding Limits to Safeguard Banks
10 Nov
Summary
- Bank of England proposes £20,000 cap on individual stablecoin holdings
- Aims to prevent deposit outflows from commercial banks, drawing industry criticism
- US takes different regulatory approach without ownership caps
On November 10, 2025, the Bank of England has unveiled proposals for a regulatory regime governing sterling-denominated stablecoins. The central bank is introducing temporary limits of £20,000 for individuals and £10 million for businesses holding systemic stablecoins.
Deputy Governor Sarah Breeden has defended the restrictions as necessary to prevent rapid deposit outflows from commercial banks that could threaten credit availability. However, she has promised that the caps will be removed once the transition no longer poses a risk to the UK economy.
The proposed regime will see joint oversight by the Bank of England for prudential matters and the Financial Conduct Authority for consumer protection. The Bank has substantially revised its initial 2023 proposal, now permitting issuers to hold up to 60% of backing assets in short-term UK government debt securities while maintaining at least 40% in unremunerated Bank of England deposits.
Industry executives have criticized the holding limits as overly cautious compared to America's approach under the GENIUS Act, which established federal stablecoin regulation without ownership caps. The proposed caps have triggered fierce criticism from crypto advocates, who view the measures as counterproductive and likely to drive users towards riskier alternatives.
