The Bank of England published a policy statement and draft Code of Practice for systemic stablecoin issuers in June 2026. The regime is at the proposed rule stage, with the draft Code of Practice open for consultation until 22 September 2026. The Bank intends to finalise the Code of Practice by the end of 2026. Once the Code of Practice is complete, regulated stablecoins are expected to operate under the new regime from 2027.
The draft Code of Practice introduces a temporary issuance guardrail set at GBP 40 billion per systemic stablecoin. The Bank selected this mechanism over the individual ownership limit previously proposed in its November 2025 consultation, citing lower implementation costs and unrestricted use by households and businesses. Reserve requirements under the draft require issuers to hold at least 70% of reserves in short-term UK government debt, up from the previously consulted 60% ceiling, with the remainder held in central bank deposits. The Bank will review the guardrail regularly and intends to remove it once risks to credit provision are addressed.
Stablecoin issuers seeking systemic designation must assess their reserve composition and issuance controls against the draft rules ahead of finalisation. Payment system operators integrating systemic stablecoins into payment rails must account for prompt redemption requirements and strong protection standards the draft Code of Practice mandates. Custodians holding stablecoin reserves must structure reserve portfolios to satisfy the government debt and central bank deposit allocation. Financial institutions evaluating stablecoin integration in consumer payment products must plan for the 2027 operational target date.
The replacement of individual ownership limits with a per-stablecoin issuance guardrail resolves a key objection raised during the November 2025 consultation but leaves unresolved the interaction between the Bank of England's systemic stablecoin regime and the FCA's parallel stablecoin authorisation regime under the Financial Services and Markets Act 2000. The criteria for classifying a stablecoin as systemic and the treatment of overseas issuers seeking UK market access remain open questions in the draft rules. Commentary from market participants notes that the GBP 40 billion guardrail may constrain near-term growth for stablecoins with potential for rapid consumer adoption.
We advise stablecoin issuers, payment system operators, and custodians on UK digital asset regulatory structuring, including positioning under Bank of England and FCA regimes. Work we undertake includes stablecoin regulatory structuring, reserve arrangement reviews, consultation response preparation, UK cryptoasset authorisation strategy, and coordination between the Payment Systems Regulator, Bank of England, and FCA across the UK digital asset regime.