meta_id 3258909

On June 22, 2026, the Bank of England (BoE) published its policy statement and draft Code of Practice (rules) for systemic stablecoin issuers, establishing the UK's regulatory framework for sterling-denominated systemic stablecoins. The policy statement confirms the following non-exhaustive list of changes: Backing assets Revision to a 70/30 backing asset composition: 70% short-term UK government debt and 30 percent unremunerated BoE deposits, consistent with historical liquidity risk events. Premitting, within backing assets, UK government debt securities with a residual maturity of up to 6 months. Both overnight repurchase (repo) and reverse repo with sterling-denominated UK government debt securities of 6 month or less maturity will be permitted. Deposits at the central bank will remain unremunerated. Commercial bank deposits will not be permitted due to financial and operational risks, and the contagion risks this would create. Similarly, a broader set of eligible assets will not be allowed. Holding limits Temporary guardrail on the level of issuance per systemic stablecoin – initially set at £40bn. Temporary guardrails on the level of issuance have been sized to achieve the same level of credit provision as holding limits. The guardrail will be regularly reviewed and removed once the risk to credit provision has been effectively mitigated. Capital and reserve requirements Updated the approach to be in line with new guidance issued by the CPMI-IOSCO for financial market infrastructure. Added guidance on the approach, calculation and avoiding duplicated resources. Proportionate application of requirements for systemic at launch issuers on case-by-case basis. The BoE plans, in future, to explore jointly with the Prudential Regulation Authority (PRA) the approach to capital requirements for issuers that are part of a banking group. Updated the GBR requirement to be the higher of: 6 months’ operating expenses; or Cost of recovery and orderly wind-down plans (excluding amounts held in wind down reserve). 6 months’ operating expenses; or Cost of recovery and orderly wind-down plans (excluding amounts held in wind down reserve). Code of Practice (CoP) provides details of how the wind-down reserve is calculated and avoids duplicated resources. Safeguarding and trust arrangements BoE will proceed with the statutory trust mechanism, it does not consider that alternative approaches provide adequate protection. There will be two trusts, one to protect coinholders’ holdings and the other to ensure an orderly wind down and return those holdings. HMT has agreed to introduce legislation to give the Bank enabling powers for statutory trusts. Allow an excess of 5% in the backing asset pool, and no limits to excesses in other reserves. Third parties must be separate legal entities but may be in the same group as the issuer. Issuance, legal claim and redemption Coinholders should have a robust legal claim for the value of their stablecoins directly against the issuer and should be able to withdraw their funds on demand at face value without undue constraint or cost. Define ‘end of the day’ as issuers having 24 hours from receipt of a full redemption request to complete a redemption on a rolling basis. Start the clock once issuers have received the request, completed AML/KYC checks and received the stablecoins in their wallet from the person/business making the redemption request. Stop the clock once the issuer instructs a valid payment order for the transfer of funds to the holder’s account. Issuers need to ensure liquidity is prepositioned for payment orders to meet redemption requests. That may be supported by the availability of funds held in the central bank deposit account. Systemic issuers remain responsible if redemptions are outsourced. They need to demonstrate that risks are sufficiently mitigated and all coinholders can redeem in normal and stress times. Issuers remain responsible for third parties’ ability to comply with the Bank’s redemption requirements by placing the obligation for redemption on issuers in the rule. The Bank will not restrict redemption models. Issuers will be required to comply with the requirements set out in the Recognised Payment System Code of Practice , to be updated in 2027, including those relating to operational resilience, third-party risk management, and recovery planning. Remuneration and rewards for coinholders Systemic stablecoins should not pay interest to coinholders, consistent with other international regimes. BoE will clarify that this policy relates to issuers paying interest or income to the holding or retention of a stablecoin, including any payment calculated by reference to the period for which a systemic stablecoin is held. BoE will permit coinholders to receive activity-based rewards and other benefits or incentives that are consistent with the use of a stablecoin as a means of payment. Payment system access BoE maintains that systemic issuers should access payment systems directly rather than through a sponsoring participant. Step-up approach for ‘systemic at launch’ issuers Proportionate application of capital requirements for systemic at launch issuers on case-by-case basis. Approach for systemic at launch firms and transitional arrangements for firms moving from FCA solo regulation will be set out in a separate Bank-FCA publication, which the Bank intends to publish shortly. An expanded set of permissible backing assets will not be permitted under the step-up approach. Section 3.2 of this policy statement includes consultation questions on the proposed Code of Practice, deadline for the consultation is September 22, 2026 and responses can be sent through the web form or by email to CP-systemicstablecoin@bankofengland.co.uk . The Bank intends to finalise the Code of Practice by the end of 2026. This framework will allow regulated stablecoins to operate in the UK from 2027. The regime does not cover stablecoins used for non-systemic purposes, such as buying and selling cryptoassets, which remain supervised solely by the FCA.