The Bank of England (BoE) announced that the UK’s regulatory framework for stablecoins will be up and running “just as quickly as the U.S.,” signalling a race to align with international norms as the stablecoin market expands rapidly.
At a recent conference, the BoE’s Deputy Governor assured stakeholders that the UK intends to implement its stablecoin rules at a pace comparable to the U.S., dismissing concerns that the country is falling behind. The upcoming regime is expected to be unveiled via a consultation on November 10, with proposed holding limits for individuals and businesses already circulating. The proposed caps include approximately £20,000 for individuals and around £10 million for businesses under the new rules.
One of the underlying reasons for the holding caps is the structure of the UK mortgage market: unlike the U.S., where household mortgages are frequently funded via capital markets, the UK’s system is dominated by commercial-bank lending. The BoE believes that unrestrained stablecoin growth could divert deposits away from banks, potentially affecting credit availability for households and businesses. The cap on holdings is seen as an interim risk-mitigation measure, to be reviewed once the BoE is confident that stablecoins are not undermining the banking system.
Harmonising speed and stability in the UK’s stablecoin regime
Strategically, the move reflects the UK’s ambition to remain a competitive global financial centre while safeguarding stability. By aiming to match the U.S. timeline, the BoE seeks to avoid regulatory arbitrage—a situation where firms shift operations to jurisdictions with looser rules. Collaboration between the UK and U.S. regulators has already increased, with a joint task force announced earlier this year.
Nonetheless, the industry has voiced concerns. Crypto business councils warn that the caps risk being “cumbersome, costly and potentially unworkable,” particularly given the fluid and cross-border nature of stablecoin holdings. Moreover, enforcement across wallets and chains may present practical challenges. For now, the BoE emphasises that the caps would only be lifted when it assesses the risks have been addressed.
In summary: the UK is signalling that its stablecoin regulatory regime is not only imminent but deliberately aligned with leading jurisdictions. The balance between speed, innovation and financial-system safety will be key as the framework moves from consultation to implementation.
