The Bank of England is taking a major step toward modernizing the country’s financial system with the launch of its long-awaited stablecoin regulatory framework on November 10. Deputy Governor Sarah Breeden announced that the new system is designed to ensure the UK keeps pace with the United States in developing clear rules for digital assets and payment innovation.
Breeden emphasized that Britain is not falling behind global competitors, stating the framework will be “up and running just as quickly as the U.S.” The move highlights the Bank of England’s commitment to maintaining stability while fostering innovation in the rapidly evolving world of cryptocurrency and blockchain technology.
Focus on Systemic Stablecoins
The new regulations will initially apply to “systemic” stablecoins — tokens expected to see widespread use in everyday payments and commerce. These assets, due to their potential impact on the financial system, will face stricter oversight from the central bank.
Other digital tokens, considered less risky, will remain under the Financial Conduct Authority’s (FCA) existing, lighter regulatory regime. To protect financial stability, the Bank of England plans to implement temporary transaction caps, including a £20,000 ($26,000) limit for individuals and a £10 million cap for businesses. These measures aim to prevent large-scale shifts of deposits from traditional banks into digital assets, a move that could disrupt sectors like the mortgage market.
Strengthening the UK’s Role in the Global Crypto Market
This regulatory launch is part of the UK’s broader strategy to remain competitive in global crypto innovation. The government has recently appointed a “digital markets champion” to accelerate blockchain adoption across industries. Additionally, the FCA has lifted its four-year ban on retail crypto exchange-traded notes (ETNs), signaling a more open approach toward digital investment products.
By introducing a clear and balanced framework for stablecoins, the UK is positioning itself as a leading hub for regulated digital finance, aiming to attract fintech innovation while maintaining consumer and market protection.
