On 30 June 2026, the Bank of England published its policy statement responding to the November 2025 consultation on sterling-denominated systemic stablecoins. The Bank simultaneously released a draft Code of Practice, open for consultation until 22 September 2026. The draft Code constitutes proposed rules, not final requirements. The Bank intends to finalise it by end of 2026.
The Bank of England's authority over systemic stablecoins derives from the Banking Act 2009, as extended by FSMA 2023 to cover systemic payment systems using stablecoins. The draft Code of Practice addresses issuance conditions, backing-asset composition, liquidity requirements, operational resilience, and governance standards. Systemic issuers must hold up to 60% of backing assets in short-term UK government debt. The remaining 40% must sit in unremunerated accounts at the Bank of England, ensuring full redemption capacity under stress.
Stablecoin issuers that HM Treasury designates as systemic will move from FCA-only supervision to joint Bank of England and FCA regulation. Until that designation is made, the Bank's regime does not bind any issuer. Non-systemic FCA-regulated issuers must monitor their growth trajectory, as crossing the systemic threshold triggers a second regulatory relationship with more stringent prudential requirements. Payment system operators, custodians, and settlement agents handling systemic stablecoin flows should assess how the Bank's requirements affect their existing obligations.
The GBP 40 billion per-stablecoin issuance guardrail replaces the holding-limit mechanism proposed in the November 2025 consultation. The Bank will review the guardrail regularly and remove it once satisfied that risks to credit provision from large-scale issuance have been managed. The criteria for guardrail review have not been specified. The treatment of cross-border stablecoin flows used in UK payments is also not addressed in the current draft Code.
Licentium advises on systemic designation risk assessment, draft Code of Practice consultation responses, and dual-regulator engagement strategy for stablecoin issuers. We can draw on a partner network for additional technical and legal capacity. Work we undertake includes systemic threshold analysis, backing-asset compliance structuring, authorisation strategy for digital payment token issuers, and regulatory representation before UK financial stability authorities.