Summary
The Bank of England published its policy statement and draft Code of Practice for sterling-denominated systemic stablecoin issuers, a key milestone in the UK's stablecoin regime. Systemic stablecoins (widely used in payments) will be jointly regulated by the Bank and FCA, while non-systemic stablecoins are FCA-regulated. The Bank made two key revisions: increasing the backing-asset share in short-term UK government debt from 60% to 70% (with 30% in unremunerated central bank deposits), and replacing per-coin holding limits with a temporary £40 billion issuance guardrail per systemic stablecoin.
Key Points
- Policy statement + draft Code of Practice; consultation closes September 22, 2026
- Backing assets: 70% short-term UK government debt, 30% unremunerated BoE deposits
- Systemic-at-launch issuers can hold up to 95% in UK government debt as they scale
- Temporary issuance guardrail: £40B per systemic stablecoin (replaces per-coin holding limits)
- Yield/interest to coinholders prohibited; activity-based rewards permitted
- Redemptions: as soon as practicable, within 24 hours of a full redemption request
- Redemptions cannot be suspended for any reason; continuous redeemability required
- Central Bank Liquidity Facility: backstop lending against UK government debt (details in 2027)
- Two statutory trusts: backing assets/financial risk reserve, and wind-down reserve
- Capital: higher of 6 months' operating expenses or cost of recovery + wind-down plans
- Direct access to payment systems expected for systemic issuers
- Code of Practice to be finalized by end-2026; regime live from 2027
- UK-US Joint Statement on Stablecoins and Transatlantic Taskforce context
- Only UK has a liquidity backstop; EU does not require unremunerated backing assets