Bank of England Replaces Stablecoin Holding Caps With £40B Guardrail
The Bank of England published updated stablecoin rules replacing previous holding caps with a £40 billion guardrail framework, setting an effective ceiling of approximately $53 billion for British pound-denominated stablecoins. Coinbase publicly stated approval of the revised framework. The update represents a concrete regulatory milestone for stablecoin operations in the United Kingdom.
Sterling Stablecoins: the Bank of England moved the cage, it didn't open it
The Bank dropped the wallet caps — no more £20,000 limits on what an individual can hold — which was the main thing making sterling stablecoins awkward as a real payment tool. That's a genuine concession.
But the constraint didn't disappear. It shifted from your wallet to the total supply: each systemic pound stablecoin is capped at £40 billion. The largest dollar stablecoins are already ten times that size.
The Bank is explicit about why: it's worried successful stablecoins will pull deposits out of banks and shrink lending. That's a legitimate concern, not cover. But it also means the UK is deliberately building a payment rail with a ceiling, then calling it a world-leading regime.
Coinbase approving of this makes sense. A licensed, capped, government-debt-backed pound token is an easy product to sell. Whether it's the kind of money the crypto ecosystem was built around is a different question entirely.
Sources · 3
- DECRYPT: Bank of England Eases Stablecoin Rules, Swaps Holding Caps for £40B ‘Guardrail’decrypt.co · T2
- CROWDFUNDINSIDER: Bank of England Posts Update on Stablecoins in the UK, Coinbase Likes What they Readcrowdfundinsider.com · T2
- British pound stablecoins capped to $53B ceiling as Bank of England sets out stablecoin rulescryptoslate.com · T2