The Bank of England (BoE) has pledged to align its stablecoin regulations with those of the United States, addressing concerns that the UK is lagging in establishing a comprehensive regulatory framework for digital assets. Sarah Breeden, Deputy Governor at the Bank of England, emphasized the importance of synchronized oversight between the two nations to foster international stability and address industry concerns.
Breeden, speaking at a conference in London on Wednesday, November 5, 2025, stated that the UK aims to have its stablecoin regime operational "just as quickly as the US". This announcement follows previous agreements between UK Chancellor Rachel Reeves and US Treasury Secretary Scott Bessent to strengthen coordination on crypto and stablecoin-related activities.
The focus on harmonization addresses worries within the crypto industry that the UK's current policy stance could hinder innovation and regulatory development compared to other jurisdictions. Some organizations had previously called on the UK government to adopt a more open approach to the crypto industry. The BoE's approach seeks to provide clarity and guidance for market participants and potential investors in the digital asset space.
The BoE is expected to unveil its proposed stablecoin regulations shortly, with reports suggesting temporary limits on holdings of £20,000 (approximately $26,087) for individuals and £10 million for businesses. However, the central bank is also considering exemptions to these limits for certain firms, such as crypto exchanges that require holding large amounts of stablecoins. These caps are intended to be temporary and may be lifted once the BoE's concerns about the potential impact of stablecoins on banks and mortgage availability ease.
One key difference acknowledged between the UK and US regimes is the approach to holding limits, with the UK adopting a more cautious stance due to its mortgage market's reliance on commercial bank lending. The BoE's proposed regulations will apply to "systemic" stablecoins, defined as those with the potential for widespread use in payments. Other stablecoins will be regulated by the Financial Conduct Authority (FCA) under a less stringent framework.
The BoE recognizes that stablecoins referencing currencies other than sterling could gain traction in the UK and will monitor their usage. If necessary, the central bank will consider adapting its regulatory framework for non-sterling-denominated stablecoins. However, the BoE does not believe that unbacked digital settlement assets are suitable for widespread use in retail payments in the UK.
The central bank's proposed regulatory regime aims to maintain confidence in money and payments, which it considers essential for preserving financial stability. The BoE's expanded remit, under the Financial Services and Markets Act 2023, reflects the rapid innovation in financial technology and the emergence of stablecoins as a new form of privately issued digital assets. The BoE will work closely with the FCA and other domestic regulators in exercising its powers.
