BoE Lays Out Strict Reserve Rules, Proposing 40% Central Bank Backing for Stablecoins
In a significant step for the digital asset industry, the Bank of England has proposed that stablecoin issuers must back at least 40% of their liabilities with deposits held directly at the central bank. The new regulatory framework targets sterling-denominated stablecoins deemed systemic to the UK’s financial system.
The proposed reserve rules are a core part of the BoE’s plan to mitigate risk. The remaining 60% of reserves could be held in short-term UK government debt, creating a highly conservative backing structure. This move is designed to ensure stability and redeemability for users.
The consultation paper, which seeks feedback until early 2026, also includes measures like a £20,000 holding limit for individuals. The central bank plans to finalize the rules in the second half of the year, setting a clear, if stringent, path for crypto businesses operating in the UK.
