On 22 June 2026, the Bank of England (BoE) published a policy statement and consultation on a draft Code of Practice in relation to sterling-denominated systemic stablecoins.

Background

The Financial Services and Markets Act (FSMA) 2023 introduced changes to the Banking Act 2009 to expand the remit of the BoE to cover digital settlement assets, including systemic stablecoins. The Financial Conduct Authority (FCA) will regulate the issuance, custody and admission to trading of UK‑issued qualifying stablecoins. In future, the FCA will also regulate their use in payments, including for non‑systemic stablecoins. However, systemic stablecoins, those that are widely used in payments and may therefore pose risks to UK financial stability, will be regulated jointly by the BoE and the FCA, once recognised by HM Treasury (HMT).

This latest publication sets out the BoE’s policy positions for the regulation of systemic stablecoin issuers, in particular how it has taken account of consultation feedback to the proposals set out in the BoE’s consultation paper on this topic published in November 2025. In addition, this publication also includes a consultation on a draft Code of Practice for sterling-denominated systemic stablecoin issuers, which implement the policy positions.

Summary

The BoE has set out where it has made changes to the proposal in response to feedback and has highlighted certain more significant policy revisions, in particular in relation to:

  • Backing assets: The proposed approach in the earlier 2025 consultation paper was to require a backing asset composition of 60% short-term UK government debt securities and 40% unremunerated BoE (central bank) deposits, with some temporary deviations permitted.  The BoE have adjusted its position to settle on bringing the central bank deposit requirement down to 30%, aligning the regime with historical liquidity stress events. For the remaining 70% it will allow issuers to hold short-term UK government debt securities with residual maturity of up to 6 months. 
  • ‘Temporary issuance guardrail’ on the level of issuance per systemic stablecoin: The BoE proposed that issuers implement per-coin holding limits of £20,000 for individuals and £10 million for businesses, with exemptions possible for larger businesses. In line with feedback from respondents,  the BoE will not implement per-coin holding limits for individuals and businesses, recognising the significant operational challenges, as well as disruption to potential use cases, which respondents indicated these measures would have imposed. Instead, the BoE will introduce a temporary guardrail on the level of issuance per systemic stablecoin product, as a transitional measure to mitigate the risks to credit provision, which will will allow each systemic stablecoin to be subject to an initial maximum issuance of £40 billion. 

In addition, the BoE has also set out some detail about areas in which it is clarifying policy following feedback:

  • Safeguarding and trust arrangements: It was proposed that backing assets should be segregated and held in a statutory trust for the benefit of coinholders. The BoE confirmed that it will proceed with the statutory trust mechanism and that there will be two trusts, one to protect coinholders’ interests and the other to cover the costs of returning value to them. HMT has agreed to introduce legislation to give the BoE enabling powers to impose statutory trusts.
  • Issuance, legal claim and redemption: It was proposed that coinholders should have a robust legal claim for the value of their stablecoins against the issuer and issuers must honour redemption requests on demand at the face value of the stablecoins without undue constraint or cost. Overall, the BoE confirmed that it will maintain the legal claim requirement set out in the 2025 consultation that issuers have an obligation to ensure coinholders are able to redeem their stablecoins at face value in money denominated in sterling, unless the holder requests redemption in a different currency. However, the BoE have provided clarity on the different elements of the redemption process, in particular on redemption timeframes, it has maintained the expectation that issuers should be able to complete requests in real time or, at latest, by the end of the business day. However, acknowledging payment system interaction and operational challenges, the BoE proposes to require redemption requests to be processed as soon as practicable, and in any event, within 24 hours of receipt of a full redemption request. This is closer to the FCA’s redemption timeframe proposed in their 2025 consultation (CP25/14).
  •  Remuneration and rewards for coinholders: The BoE maintained its policy that systemic stablecoin issuers should not pay interest to coinholders. However, the BoE has also provided greater clarity on the distinction between prohibiting interest on stablecoin holdings and permitting other forms of incentives, such as activity-based rewards that are consistent with the use of a stablecoin as a means of payment.
  • Payment system access: The BoE maintained its expectation that systemic stablecoins should directly access payment systems to support frictionless redemptions.
  • Step-up approach for ‘systemic at launch’ issuers: The BoE proposed that stablecoin issuers recognised by HMT as systemic at launch, those that are considered as systemically important from the outset of their operations, could be allowed to hold up to 95% of their backing assets in sterling-denominated UK government debt securities as they scale, with the remaining 5% being held in unremunerated central bank deposits, but the percentage would be reduced to 60% once the stablecoin reaches a scale where this is appropriate to mitigate the risks posed by the stablecoin’s systemic importance without impeding the firm’s viability. However, this has now been adjusted to reflect the updated proposal on backing assets calibration of 30% in unremunerated central bank deposits and 70% in short-term UK government debt securities with up to six months maturity.

The BoE also confirmed that the policy proposals remained unchanged in relation to non-sterling stablecoins, location requirements and ledgers.

Further, in terms of new policy, the BoE highlighted two further areas that it is finalising as it implements the regime, namely:

  • Central bank liquidity facility: The BoE intends to introduce a lending facility for systemic stablecoin issuers, providing short-term, collateralised loans of central bank deposits against sterling-denominated UK government debt collateral and intends to publish further details on the design and operating parameters of the central bank liquidity facility in 2027, with access for eligible firms to follow shortly thereafter. Subsequent updates will also then be made to the Code of Practice to accommodate the use of the facility by systemic issuers. The detailed design of the facility, including pricing and any access conditions, will reflect the policy objective of ensuring that the facility is a backstop and not a front-stop, and that it is available for fundamentally solvent and viable systemic stablecoin issuers.
  • Disclosures: The BoE intends, as a primary measure, to rely on the FCA’s proposed disclosure requirements for stablecoin issuers recognised as systemic under the BoE’s part of the regime. However, if and where necessary to address gaps that the BoE determines require additional disclosures, the BoE will apply its own supplementary disclosure requirements to systemic issuers. The BoE will consider the evolution of issuers’ business models before setting any additional requirements and expects to provide further detail on its approach in future publications.

Finally, the BoE has asked for feedback in relation to its draft Code of Practice, which is intended to implement the policy proposals confirmed or clarified above, and has asked for feedback by 22 September 2026.

Next steps

The BoE sets out that it intends to finalise the Code of Practice by end‑2026, after which it will apply to recognised systemic stablecoin issuers.

In addition, the BoE confirmed that it is also releasing a joint publication with the FCA shortly, which will set out how the two parts of the UK’s stablecoin regime will operate in an integrated, end‑to‑end manner, including the approach to firms transitioning between them.

Finally, the BoE sets out that it will also consult on and publish some final supporting materials for systemic stablecoin issuers in 2027.