The Bank of England and the Financial Conduct Authority published a joint approach on June 30, 2026 setting out how the two will divide regulation of systemic stablecoin issuers in the United Kingdom. The statement, posted on the FCA site, describes an integrated regime: an issuer starts under FCA supervision and moves into joint Bank of England and FCA regulation once HM Treasury formally designates it as systemic.
The joint document is the connective tissue. The harder numbers sit in the Bank of England's own policy statement and draft Code of Practice, released the week before, which reworked the UK's earlier stablecoin proposals in two consequential ways.
A £40 billion ceiling replaces per-person holding caps
The Bank dropped the holding limits it floated in November 2025, which would have capped individuals at £20,000 of a single systemic stablecoin and businesses at £10 million. In their place is a temporary issuance guardrail set at £40 billion for each systemic stablecoin.
The shift moves the limit from the wallet to the issuer. Rather than policing how much any one person can hold, the Bank is bounding how large a single sterling stablecoin can grow before it becomes a concentration risk for the wider financial system. The £40 billion figure is described as temporary, a starting calibration the Bank can revisit as the market develops rather than a permanent fixture.
That reframing matters for usability. Per-person caps would have been awkward for anyone trying to actually spend or save in a regulated sterling coin, since a hard ceiling on holdings cuts against treating a stablecoin like cash. An issuance guardrail leaves individual balances alone.
The Bank takes the systemic tier, the FCA keeps the rest
The two-regulator structure is the core of the joint approach. The FCA authorises and supervises stablecoin issuers under its broader cryptoasset regime. If an issuer scales to the point where HM Treasury designates it systemic, the Bank of England steps in as the prudential regulator, with the FCA still involved on conduct.
The joint publication is meant to explain how a firm transitions between those two states without falling through a gap, an end-to-end handoff rather than two disconnected rulebooks. The stated aim is to "provide clarity and predictability for firms as the market develops." Further joint material is expected to follow.
Backing rules tighten the issuer's margin
The Bank also recalibrated what must sit behind each coin. The backing now splits into 30% held in unremunerated deposits at the Bank of England and 70% in short-term UK government debt maturing within six months. The earlier proposal leaned more heavily on central bank deposits, at roughly 40%, with 60% in gilts.
The direction is double-edged for issuers. Letting more reserves sit in short-dated gilts rather than non-interest-bearing central bank deposits gives issuers some yield to work with, since the deposit portion earns nothing. The flip side is a strict, low-duration, sterling-denominated reserve that limits how creatively an issuer can manage its book. A £40 billion coin holding 30% at the Bank parks £12 billion earning zero return.
Sterling stablecoins meet the spending question
For anyone who uses stablecoins to spend or settle, the relevance is less about today and more about what a regulated sterling coin could look like. Most crypto card balances today are denominated in dollar stablecoins like USDC and USDT, which now command a market larger than some major chains, with Tether's USDT having overtaken Ethereum by market cap. A credible, regulated GBP coin sitting inside a clear Bank of England framework would give UK users a domestic option that dollar coins cannot match on currency risk.
The tension is whether the rules let one grow large enough to be useful. A £40 billion guardrail is generous next to where any single sterling stablecoin sits today, so it is unlikely to bind soon. But the structure signals intent: the UK wants a stablecoin market, with a brake built in before any coin reaches systemic scale.
Timing is set. The Bank is taking feedback on its Code of Practice until September 22, 2026, and intends to finalise it by the end of the year. That puts a working systemic regime within reach in 2027, the same window in which the FCA's broader cryptoasset rules take force.
Overview
On June 30, 2026 the Bank of England and FCA published a joint approach to regulating systemic stablecoin issuers, with the FCA handling authorisation and the Bank stepping in once HM Treasury designates a coin systemic. The Bank's accompanying policy statement scrapped earlier per-person holding limits (£20,000 for individuals, £10 million for businesses) in favour of a temporary £40 billion issuance guardrail per coin, and set backing at 30% in Bank deposits and 70% in short-term UK gilts. Feedback closes September 22, 2026, with the Code of Practice due to be finalised by year-end.
