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The Bank of England has published a policy statement and draft Code of Practice for sterling-denominated systemic stablecoin issuers, confirming its policy direction and consulting on the draft rules that will apply once an issuer is recognised as systemic.
The statement shows how the Bank has responded to feedback on its November 2025 consultation. In particular, it has revised its approach to backing assets and replaced the proposed holding limits with a temporary issuance guardrail for each systemic stablecoin product. The Bank expects to ultimately remove the guardrail once it is satisfied that risks to credit provision have been effectively mitigated.
The Financial Services and Markets Act 2023 amended the Banking Act 2009 to expand the Bank's remit to digital settlement assets, including systemic stablecoins.
Under the UK's stablecoin regime, the FCA will regulate the issuance, custody and admission to trading of UK‑issued qualifying stablecoins. In the future, it will also regulate their use in payments, including for non‑systemic stablecoins. Systemic stablecoins, that is, stablecoins that are widely used in payments and may pose risks to UK financial stability, will be regulated jointly by the Bank and the FCA, once recognised by HM Treasury.
Given sterling's role in UK payments and as a global currency, the Bank's approach focuses primarily on sterling‑denominated systemic stablecoin issuers. It also provides for non‑sterling‑denominated systemic stablecoins if their use becomes widespread in the UK.
Appendix 4 contains the draft Code of Practice for sterling-denominated systemic stablecoin issuers, which gives effect to the Bank's policy positions. The draft Code includes rules on:
- Backing assets and safeguarding.
- Capital and reserves.
- Issuance, legal claim and redemption.
- Remuneration.
- Temporary issuance guardrail.
Next steps
The consultation ends on 22 September 2026. The Bank intends to finalise the Code by the end of 2026, after which it will apply to recognised systemic stablecoin issuers.
The Bank also plans to publish a joint regulatory approach document with the FCA shortly. This will explain how the two parts of the UK stablecoin regime will work together, including the approach to firms moving from FCA-only regulation to joint FCA and Bank regulation.
In 2027, the Bank expects to consult on and publish further materials to support the new regime, as set out in section 3.3 of the policy statement.
Overall, the policy statement gives firms a clearer indication of how the systemic stablecoin regime is expected to operate, although further detail will follow through the final Code, the joint FCA and Bank materials and the Bank's 2027 supporting publications.
Why this matters
The revised approach is likely to be seen as a more workable route for stablecoin issuers than the Bank's earlier proposals, particularly because it moves away from individual holding limits and allows a greater proportion of backing assets to be held in short-term UK government debt. Firms developing stablecoin products, payment infrastructure or tokenised settlement models should monitor the finalisation of the Code and the forthcoming joint FCA/Bank materials, as these will shape how firms move from FCA-only to joint regulatory oversight.
The US is consulting on similar issues, proposing a rule to implement certain provisions of the Guiding and Establishing National and Innovation for U.S. Stablecoins Act (GENIUS Act). Specifically, the proposed rule implements the GENIUS Act's directives to treat permitted payment stablecoin issuers as financial institutions under the Bank Secrecy Act and to require issuers to maintain an effective customer identification program. That consultation ends on 21 August 2026.
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