Bank of England Issues Draft Code for Sterling Systemic Stablecoins

The Bank of England has published a policy statement and consultation on a draft Code of Practice governing sterling-denominated stablecoins designated as systemically important. The framework sets operational, prudential, and disclosure standards for issuers whose tokens reach critical scale in payments or settlement infrastructure, treating them analogously to recognised payment systems under existing oversight regimes.

The consultation marks the final pre-implementation step before systemic stablecoin regulation becomes enforceable in the UK. Issuers anticipating designation will need to demonstrate compliance with reserve composition, redemption mechanics, and operational resilience requirements outlined in the Code. The Bank has not named specific tokens or thresholds triggering systemic status, leaving market participants to infer designation criteria from transaction volume, interconnectedness, and substitutability metrics.

Responses are due by September 2026, with final rules expected before year-end. The consultation runs in parallel with HM Treasury’s broader stablecoin legislation, creating a two-tier regime: lighter rules for non-systemic issuers, Bank oversight for systemic ones.