Bank of England shifts systemic stablecoin caps from holder to issuer level

The Bank of England has published its policy position and draft code of practice for systemic stablecoin issuers, retreating from earlier proposals that drew substantial industry pushback. The central bank previously floated holding limits of £20,000 for individuals and £10,000 for other holders, a structure now abandoned in favour of issuer-level constraints.

The reversal follows objections to both the holder caps and the central bank’s stance on reserve requirements. By moving the constraint from end-user wallets to issuer balance sheets, the Bank acknowledges operational friction and competitive risk inherent in retail-level ceilings. The draft code signals a pragmatic recalibration: systemic designation remains the threshold, but the regulatory load shifts upstream.

The question from here is how issuer-level caps translate into capacity planning and cross-border fungibility. A cap on total issuance or on sterling-backed circulation carries different implications for liquidity provision and redemption queues than per-holder thresholds, and the draft leaves those mechanics to be worked through in consultation.