Latest Report: BoE Deputy Governor Breeden Signals Retreat on UK Stablecoin Ownership Limits in Cryptocurrency

The Bank of England is walking back key parts of its stablecoin rulebook after the digital assets industry pushed back hard against proposals officials now admit may have gone too far. Key Takeaways Bank of England Deputy Governor Sarah Breeden told the Financial Times (FT) its stablecoin ownership limits may have been “overly conservative.” The BoE plans to lower its 40% central bank deposit requirement, which is stricter than U.S. rules, hurting UK stablecoin profitability. Breeden signaled the BoE sees no urgency to raise rates in June or July 2026, despite markets pricing in 2 to 3 hikes this year. Bank of England Revisits Stablecoin Limits That Industry Called ‘Cumbersome’ Deputy Governor Sarah Breeden, who oversees financial stability at the UK central bank, told the Financial Times (FT) the BoE is “looking very hard at whether there are different ways we can manage what we think is an important risk as stablecoins come into play.” FT journalists Martin Arnold and Sam Fleming reported on the matter. Stablecoins are digital tokens pegged one-to-one to a fiat currency such as the U.S.

dollar. The BoE had proposed capping individual ownership of UK sterling-based stablecoins at 20,000 pounds per coin, with businesses limited to 10 million pounds, as a guardrail against large deposit outflows from banks. The report notes that industry groups called those limits operationally “cumbersome.” Breeden acknowledged the criticism directly. “We are genuinely open to thinking whether there are other ways of achieving our objective,” she told the FT. The BoE is also reconsidering a separate rule requiring at least 40% of assets backing a UK stablecoin to sit on deposit at the central bank, earning no interest.

The remainder would be held in sovereign bonds and other liquid assets. The FT editorial noted that the requirement is far stricter than rules in the United States, making UK-based stablecoins less profitable to operate. Breeden said the 40% figure came from studying the pace of withdrawals during the 2023 Silicon Valley Bank collapse and other recent stress events.

“It was based on experience of potential liquidity stress,” she explained. “But we will look hard to see if we have been overly conservative in our thinking there.” Sterling-based stablecoins currently account for less than 0.5% of a global stablecoin market worth over $320 billion, according to the FT report’s stats. Crypto companies have warned that the UK risks losing ground in the race to build a competitive digital assets sector. Breeden disclosed to the FT reporters that the central bank wants UK stablecoins to work.

“We are keen to create a regime where stablecoins can succeed and can deliver benefits to the users,” she said. “But it is money, and we want to make sure that this new form of money is safe.” On separate monetary policy questions, Breeden pushed back against any expectation of near-term rate moves. Markets are currently pricing in two or three UK interest rate increases in 2026, with the first expected as early as summer.

Breeden told the FT that timeline is not binding.  » …

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Carla Contass

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