Bank of England Says UK Stablecoin Regulations Are Advancing ‘Just as Quickly’ as in the US

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What the BoE said

  • At the SALT conference in London, Deputy Governor Sarah Breeden said the UK’s new stable-coin regulatory framework is intended to be operational “just as quickly as the U.S.”. (Decrypt)
  • She emphasised the need for the UK and the U.S. to collaborate on stable-coin regulation, noting talks between BoE, the Federal Reserve and finance ministries in both jurisdictions. (TradingView)
  • The BoE is planning to publish its proposed regime for stable-coins on or around 10 November 2025. (CoinDesk)
  • The proposed rules include temporary holding caps for what the BoE calls “systemic” stable-coins (those likely to be widely used in payments) — e.g., around £20,000 (≈US$26,000) for individuals and £10 million for businesses. (Decrypt)
  • Breeden explained that the UK’s mortgage and banking structure leads to different risks than the U.S., which influences the BoE’s approach (in particular the caps). The U.S. mortgage market is funded differently (through agencies like Fannie Mae/Freddie Mac) compared to the UK where commercial banks dominate. (CoinDesk)
  • The BoE indicated that the holding caps might be transitional, to allow time to assess how stable-coins affect the banking/deposit system. (PYMNTS.com)

Why this matters

  • The stable-coin market has grown significantly; central banks and regulators worldwide are concerned that if stable-coins become widely used as payments or substitutes for bank deposits, they could pose financial-stability risks, e.g., bank run risks, deposit outflows, fragmentation of banking functions. (Reuters)
  • By signalling that the UK will act “just as quickly” as the U.S., the BoE is trying to allay concerns by industry groups that the UK is falling behind global competitors. (Decrypt)
  • The coordination with the U.S. is also strategic: cross-border flows of digital assets, global payment networks, and harmonised regulation reduce regulatory arbitrage and promote global financial stability. (The Paypers)

UK vs US: How they compare

United States

  • The U.S. recently passed (or is in the process of implementing) legislation for stable-coins (for example the GENIUS Act) that enables banks and financial institutions to issue fiat-backed stable-coins. (Decrypt)
  • The U.S. regime is seen as moving fast, and the BoE is using that as a benchmark.

United Kingdom

  • The UK’s framework is still being finalised; the consultation is forthcoming (Nov 10) and rules are intended to be operational in the near term (potentially by end of next year) if the timeline holds. (CoinDesk)
  • The UK’s proposed holding caps for individuals and businesses are more stringent than many expected, which is drawing scrutiny from the crypto industry. (Financial Times)
  • The UK is emphasising the distinction between “systemic” stable-coins (those with the potential to become universal payment rails) vs less-systemic ones (which will face lighter regulation). The systemic ones will be particularly subject to BoE oversight. (Reuters)

Key takeaways & where to watch

  • The BoE is telling the market: UK stable-coin regulation will not lag the U.S.; it intends to keep pace.
  • But “just as quickly” does not mean identical. Differences in financial structure (banking, mortgage funding) mean the UK will chart its own path albeit broadly aligned.
  • The consultation (Nov 10) and subsequent final rules will be critical. Industry participants should pay close attention to:
    • How “systemic” stable-coins are defined.
    • The exact cap levels and whether they apply universally or just to “systemic” ones.
    • The transitional nature of caps and the criteria for any relaxation.
    • How cross-border stable-coins/issuers will be treated (e.g., issued outside the UK).
    • The interplay with existing UK regulation (via Financial Conduct Authority) and with US regulation.
  • For UK firms and international stable-coin issuers, this means planning ahead: compliance, risk-assessment, holding limits, custody models, and cross-border licensing/registration may all shift.
  • For users, the holding caps may become real constraints (at least initially) and that suggests caution when treating stable-coins as a “bank substitute”.
  • Here are case studies and commentary around the Bank of England (BoE)’s announcement that UK stable-coin regulation is moving “just as quickly” as in the US — including how the industry is reacting, how the UK is structuring its regime, and what lessons are emerging. I’ll split the discussion into: (1) key regulatory design features / comments by the BoE and UK authorities, (2) real-world industry / market responses (case studies), and (3) major risks & implications.

    1. Regulatory design & official comments

    Key comments

    • At a conference in November 2025, Deputy Governor Sarah Breeden stated the UK’s stable-coin regulatory regime will be operational “just as quickly as the U.S.”. (CoinDesk)
    • She noted that given the UK’s mortgage and banking system differences (UK mortgages are more often directly with commercial banks vs. the US model), the UK sees a need for holding limits on stable-coins for individuals and firms as part of the transitional model. (CoinDesk)
    • The BoE’s 2023 discussion paper lays out that if stable-coins become used in “systemic payment systems” they will be regulated under the same risk / same outcome principle as other systemic payment systems. (Bank of England)
    • The BoE emphasises in responses to its earlier discussion paper that temporary limits may be used to manage transition risk (for example, deposit outflows from bank deposits into stable-coins) while the system adapts. (Bank of England)

    Regulatory features as currently envisioned

    • The UK regime categorises stable-coins by scale: “non-systemic” stable-coins (smaller scale) will have lighter regime; “systemic payment systems using stable-coins” (i.e., widely used in retail payments) will have a heavy-duty regime (BoE oversight) under the expanded powers from the Financial Services and Markets Act 2023. (Bank of England)
    • The BoE consultation (scheduled for 10 Nov 2025) is expected to propose holding caps: e.g., ~£20,000 for individuals, ~£10 million for businesses (for “systemic” stable-coins) at least initially. (CoinDesk)
    • The BoE and the Financial Conduct Authority (FCA) have published papers together: the FCA’s discussion around stable-coin issuance/holding, and BoE’s around payment-system scale. (Bank of England)

    Key official reasoning / rationale

    • The BoE is seeking to protect financial stability, especially given the risk that large-scale stable-coins could function like bank deposits (or substitutes) and lead to deposit outflows from banks, which undermine credit creation. The BoE Governor Andrew Bailey has spoken to that effect. (Reuters)
    • The rationale for holding limits, meanwhile, is the transitional phase: until the new form of money (via stable-coins) is well-understood, caps help moderate the shift of funds out of traditional deposits. (Bank of England)
    • Modular/regime flexibility: the BoE notes that different legal entities might perform different roles (issuer, settlement, wallet/custody) and the regime is designed to fit business-model diversity. (Bank of England)

    2. Market / industry case studies & reactions

    Here are two illustrative case studies (one from industry reaction and one from bank/market behaviour) plus commentary.

    Case Study A: Industry reaction – stable-coin ownership limits

    • The proposal of holding caps (individual ~£10-20k, businesses ~£10 m) has drawn strong criticism from the crypto industry: e.g., Coinbase’s VP of international policy (Tom Duff Gordon) said:

      “Imposing caps on stablecoins is bad for U.K. savers, bad for the City and bad for sterling.” (CoinDesk)

    • Industry groups argue enforcement will be difficult (needs digital identity / wallet tracking) and that the UK would be more restrictive than the US or EU, making it less competitive for fintech/crypto firms. (CoinDesk)
    • The BoE responded by emphasising the limits are temporary and meant to allow a safe transition. (Finance Magnates)
    • Commentary: While the cap-based approach is novel in major jurisdictions (most others put focus on issuer supervision, reserve backing, redemption rights rather than holding caps), it reflects UK’s emphasis on protecting the banking system vis-à-vis large-scale outflows.

    Case Study B: UK banks & tokenised deposits

    • In late September 2025, major UK banks (HSBC, NatWest, Lloyds Banking Group, Barclays, etc) launched pilots for tokenised deposits (blockchain-based digital representation of deposits) for payments, remortgaging, digital asset settlement — after the BoE’s warnings about stable-coins. (Reuters)
    • The BoE governor Andrew Bailey encouraged banks to focus on tokenised deposits rather than private stable-coins, positioning banks’ digital deposits as the safer route to digital money. (Reuters)
    • Commentary: This shows how regulatory signals (BoE scepticism of stable-coins) are already shifting industry behaviour: banks are moving towards regulated, tokenised deposit models rather than purely private stable-coins, arguably aligning more with the BoE’s desired direction.

    3. Implications, lessons & what to watch

    Implications

    • For issuers of stable-coins and fintech firms in the UK: there’s clarity that a major regulatory regime is coming soon (consultation Nov 10 2025) and that the UK aims to keep pace with the US. That creates urgency.
    • For banks/traditional financial institutions: the shift suggests banks may gain advantage if they act early on tokenisation and digital-money innovation within the regulated system, rather than being sidelined by un-regulated stable-coins.
    • For consumers and retailers: stable-coins may still play a role in payments, but initial holding/transaction limits mean they won’t immediately replace bank money or deposits for large flows.

    Key lessons

    • “Same risk, same outcome” is a guiding principle: new digital money must face equivalent regulatory outcomes to traditional money/ payment systems. (BoE discussion paper) (Bank of England)
    • Transitional tools (holding limits, phased roll-out) are being used to manage uncertainty in digital money adoption (in recognition of deposit outflow, bank-credit creation risks).
    • Regulatory alignment matters: UK industry wants alignment with the US so that cross-border business isn’t disadvantaged. (Cointelegraph)
    • Structural differences between jurisdictions matter: UK’s banking/mortgage structure leads to different risk-profiles vs. US, and that explains the UK’s different choices (e.g., holding limits) as highlighted by Breeden. (CoinDesk)

    What to watch (for the user / industry)

    • Definition of “systemic” stable-coins: how many users, transaction volume, flows will trigger the heavy regime? The consultation is expected to clarify.
    • Final cap levels: will the individual ~£20k and business ~£10 m caps stand? Will they apply only to “systemic” coins or all stable-coins?
    • Issuer/reserve rules: how will backing of stable-coins be regulated (liquid assets, high quality liquid assets, central-bank reserves)? The BoE paper lists models like “bank-model”, “HQLA-model”, “deposit-backed model”. (Bank of England)
    • Cross-border & non-UK issuers: how will stable-coins issued abroad but used in UK payments be treated?
    • Interaction with bank deposit system: Will stable-coins obtain access to BoE settlement accounts? What will be the treatment of tokenised deposits vs private stable-coins? Governor Bailey has flagged these issues. (Reuters)
    • Implementation timing: The BoE says “just as quickly as the U.S.,” but the consultation timeline and final rule-making will determine the real pace. Industry should track the Nov 10 consultation and legislative steps.

    4. Summary of Comments

    • On the positive side, trade bodies like CryptoUK welcome the ambition for rules aligned with the U.S., saying that this “would provide more confidence to the industry” and help the UK “keep pace” with global peers. (Cointelegraph)
    • On the critical side, crypto firms warn that holding caps are “unworkable”, risk driving business abroad, and are more restrictive than U.S./EU regimes. (CoinDesk)
    • The BoE emphasises caution, stability and that the framework is about managing risk rather than stifling innovation — e.g., Breeden said the limits are less of an issue “in practice than people might think”. (CoinDesk)

 

Categories: GB News, UK News