Bank of England drops GBP stablecoin holding limits and eases reserve requirements
- Tokenization Insight
- 3 days ago
- 2 min read
Bank of England drops GBP stablecoin holding limits and eases reserve requirements in move aimed at supporting stablecoin adoption.
The Bank of England has abandoned its proposal to cap individual and corporate holdings of UK-regulated stablecoins, replacing it with a £40 billion issuance threshold. It has also reduced the proportion of reserve assets that must be held in non-interest-bearing deposits at the central bank.
➡️ Why this matters
The UK is facing growing pressure to remain competitive as USD stablecoins continue to scale globally across payments, trading, and settlement.
Industry participants had consistently argued that both holding caps and reserve restrictions would significantly limit the viability of GBP stablecoins.
Under the revised framework:
• Individual holding limits of £20,000 per stablecoin have been removed
• Corporate holding limits of £10 million have been removed
• The share of reserves required to be held in non-interest-bearing Bank of England deposits has been reduced from 40% to 30%
➡️ The bigger question
Regulatory barriers may be falling, but demand remains the key challenge.
USD stablecoins benefit from the global role of the US dollar, deep dollar liquidity, and widespread use across cross-border payments, capital markets, and crypto trading.
GBP does not enjoy the same network effects.
The critical question is therefore not whether GBP stablecoins can now be issued more easily, but where they can deliver a clear advantage over existing payment and settlement infrastructure.
What are the use cases where GBP stablecoins can achieve meaningful adoption?
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