Bank of England launches consultation on regulating systemic stablecoins
Executive Summary
The Bank of England has published a consultation paper (issued November 10, 2025) proposing a comprehensive regulatory regime for **sterling-denominated systemic stablecoins**, establishing requirements for backing assets, capital, redemption procedures, and operational safeguards. This represents a pivotal step toward implementing the UK's stablecoin framework, with the regime designed to maintain financial stability while enabling viable business models for systemic stablecoin issuers.
What Changed
The proposed regulatory regime introduces several material requirements for systemic stablecoin issuers: Backing Asset Composition Systemic stablecoin issuers will be permitted to hold up to 60% of backing assets in short-term sterling-denominated UK government debt, with the remaining 40% held as deposits at the Bank of England. For stablecoins recognized as systemic at launch, a temporary "step-up" regime allows up to 95% of backing assets in UK government securities, which would reduce to 60% once the stablecoin reaches appropriate scale. Capital and Reserve Requirements The regime establishes specific capital and reserve requirements, though the consultation paper seeks further input on the detailed design of these provisions. Redemption and Coinholder Rights The Bank has clarified
What You Need To Do
- *For Systemic Stablecoin Issuers
- *Monitor and respond to consultation - Submit detailed comments on proposals before February 2026 deadline, particularly on:
- Alternative tools to achieve regulatory objectives
- Backing asset composition and holding limits
- Safeguarding regime design
- Central bank liquidity arrangements
Key Dates
Compliance Impact
Urgency: HIGH
Who is Affected
Summary
The Bank of England (the Bank) has today published a consultation paper (CP) setting out its proposed regulatory regime for sterling-denominated systemic stablecoins.