UK to Roll Out Stablecoin Regime in Step With US, Says Official
- The Bank of England will release stablecoin regulation plans next week with holding limits.
- Sarah Breeden said the UK aims to launch its stablecoin regime as quickly as the United States.
- Temporary holding cap will protect UK banks until regulators assess stablecoins’ lending impact.
The United Kingdom plans to launch its new stablecoin regulatory framework as swiftly as the United States, according to Bank of England Deputy Governor Sarah Breeden. She made the comments during a financial conference in London on Wednesday, addressing growing industry concerns that Britain was lagging behind in digital asset regulation.
Breeden confirmed that the Bank of England (BoE) will publish its proposed framework for stablecoin regulation on Monday. The proposal will outline the first steps in creating a structured environment for digital assets tied to fiat currency. She said the UK’s approach may look different from the US model, but it will advance on a similar timeline.
BoE to Set Temporary Caps on Stablecoin Holdings
The proposed framework will include temporary holding limits for both individuals and businesses. According to reports, individuals may have a cap of £20,000 ($26,087), while companies would be limited to £10 million. Breeden explained that the limits will help protect the financial system as regulators assess how stablecoins might influence credit supply and the banking sector.
“The limits are intended to be temporary,” she said. “They will be lifted once we understand more about how stablecoins affect banks and lending.”
The Bank of England intends to have the rules fully operational by the end of next year. The approach aims to align with the United States, where the recently passed GENIUS Act has established a comprehensive framework for fiat-backed digital assets.
Breeden emphasized that the UK’s stablecoin plans are designed to move in parallel with the US, rejecting claims that Britain is falling behind. “Our aim is to make sure that our regime is up and running, just as quickly as the US,” she said. “It’s really important that we do this together.”
Key Differences Between UK and US Approaches
While both the UK and US are moving toward similar regulatory outcomes, Breeden highlighted structural differences between their financial systems. She said those differences justify a more cautious rollout in Britain.
In the US, mortgage lending primarily comes from entities like Fannie Mae and Freddie Mac, which rely on capital markets for funding. In contrast, British households depend heavily on commercial banks for mortgage credit. Regulators worry that a large-scale shift toward stablecoins could reduce deposits held in banks, affecting their ability to lend.
“People in the US get their mortgages from Fannie and Freddie, and they’re funded in financial markets,” Breeden said. “People in the UK get their mortgages from commercial banks. That’s why we need to proceed carefully.”
Related: Bank of England Clarifies Stablecoin Limits Are Only Temporary
The BoE’s framework will also include provisions for risk management, transparency, and oversight of reserve assets backing stablecoins. Officials say these measures are necessary to protect consumers and maintain confidence in digital transactions.
Breeden described the regulatory push as a “fabulous opportunity” for global cooperation. She said aligning timelines with the United States would make it easier for financial institutions to adapt to both markets simultaneously.
She concluded by reaffirming the central bank’s commitment to innovation within a stable regulatory framework. “We’re building the foundation for a safe and competitive system,” she said. “Strong coordination will help both the UK and US shape the future of digital finance.”
With the Bank of England now preparing to release its proposals, the UK’s stablecoin journey is entering a crucial phase. The first draft of the rules will open for consultation, setting the stage for a potential rollout by late 2025.
