Bank of England He published an update on the draft rules for stablecoins. Bank stated:
“(This) marks a significant milestone in delivering a comprehensive UK regime for stablecoins. It sets out a clear path for UK-issued, sterling-denominated stablecoins to operate at scale across a range of retail and wholesale use cases.”
Stablecoins are privately issued digital currencies that are often tied to fiat currency.
The bank said users should be able to transfer value using a variety of options that include traditional bank deposits, tokenized ones, stablecoins and perhaps CBDCs (central bank digital currency).
In general, the options available to the public should increase competition and therefore provide better services.
In the US, CBDCs are on track to be banned due to extensive privacy and abuse concerns, while elsewhere CBDCs are still up for debate, with the EU moving towards issuing one and the Chinese already offering a digital yuan.
Bank of England says there could be a ‘free role’ for stablecoins alongside commercial bank money in wholesale markets
More updates are said to be coming soon.
The draft includes requirements for reserves.
There is an “Interim guardrail” set at £40bn in issuance level per systemic stablecoin.
The bank said it had listened to feedback provided by relevant parties and made “significant changes”.
The bank distinguishes between systemic stablecoins, which are largely used for payments, and non-systemic stablecoins. Both will be regulated by the Bank and the FCA.
The draft is open to public feedback, with a deadline of September 22, 2026.
coinbaseCoinbase, a player in the stablecoin market, issued a stamp of approval for the update, which was shared by Coinbase Chief Legal Officer Paul Grewal. he stated X HE “We pushed for clear, enforceable rules, and the UK has delivered: no more wallet limits, simpler reserve requirements and recognized US oversight of foreign stablecoins. We will see more and more clarity on stablecoins globally.”
Dollar-based stablecoins currently dominate the digital assets industry by hundreds of billions of dollars, led by Tether (USDT) and USDC. Pound-based stablecoins are almost non-existent at the moment.
