UK Publishes Final Crypto Regulatory Framework With Diluted Stablecoin Capital Rules

The Bank of England dropped the rules that genuinely couldn't work — per-user holding limits are nearly impossible to enforce across wallets — and replaced them with a single £40 billion ceiling on each systemic sterling token.

That sounds generous. The problem is that stablecoin networks only become useful at scale: more users attract more merchants, deeper liquidity, more integrations. The network effect is the whole product. A hard ceiling that kicks in before those effects mature leaves you with a coin that is perfectly safe and almost completely pointless for the cross-border and wholesale settlement that would justify building it.

The BoE calls the cap temporary. Maybe so. But sterling already represents 0.5% of a $315 billion global market dominated by dollar tokens with no ceiling at all. The UK just made its stablecoin rules survivable. It hasn't yet made them competitive.

The FCA just halved the capital charge on stablecoin issuance — from 2% to 1% — after industry pushed back on the earlier proposal.

That's the tell. When a regulator publishes a 'final' framework and the headline change is a concession to the firms being regulated, the framework is working as intended by those firms, not by consumers.

The rules are real enough: licensing by October 2027, market abuse controls, disclosure documents. But the stablecoin capital cut is a reminder that 'regulatory certainty' and 'tough regulation' are not the same thing.