On June 22, 2026 Bank of England news release, the Bank of England published its final policy statement and draft Code of Practice for systemic stablecoin issuers. The framework creates the UK’s first binding regulatory regime for payment-focused stablecoins.
It caps UK systemic stablecoin reserves at 70% short-term UK government debt securities maturing in six months or less. The rules eliminate per-user holding limits in favor of a £40 billion per-product issuance guardrail. A 2027 target operating window is set for regulated pound-denominated payment stablecoins. Payment stablecoins are placed in a separate supervisory lane from ordinary cryptoasset trading, with systemic issuers subject to enhanced oversight by the Bank of England and FCA Bank of England policy statement.
70% Short-Term UK Gilt Reserve Cap for Systemic Stablecoins
The 70% reserve cap applies exclusively to short-term UK government debt securities maturing in six months or less. Issuers must hold a minimum of 30% of backing assets as unremunerated deposits at the Bank of England. This 70/30 split replaces the 60% short-term UK government debt / 40% unremunerated Bank of England deposit split proposed in the Bank’s 2025 consultation.
Industry feedback argued the 40% unremunerated deposit floor was too conservative and raised issuer operating costs. The Bank judged the new split still supports credible liquidity for redemptions while improving the economic viability of issuing pound-denominated stablecoins Bank of England policy statement Bank of England earlier consultation.
For example, a £1 billion systemic stablecoin would need £300 million in unremunerated Bank of England deposits and £700 million in short-term UK gilts maturing in six months or less to comply with the reserve requirements.
£40 Billion Per-Product Issuance Guardrail Replaces User Holding Limits
The Bank abandoned per-user holding limits for stablecoins proposed in its 2025 consultation. It replaced them with a £40 billion per-product issuance guardrail for systemic stablecoins. The guardrail is applied at the individual stablecoin product level, not per user. Any single systemic stablecoin may reach the £40 billion cap.
Exceeding that threshold requires issuers to demonstrate to HM Treasury and the Bank of England that additional issuance will not threaten UK credit conditions. The Bank has stated the guardrail is temporary, and will be removed once risks to credit provision have been fully addressed Bank of England policy statement.
The final framework also includes a Central Bank Liquidity Facility backstop for systemic issuers, alongside formal capital requirement and safeguarding trust structure rules Bank of England policy statement.
Mandatory Same-Day Redemption and Safeguarding Requirements
Redemption rules now require issuers to complete all valid redemption requests by end of business on the day the request is submitted. The Bank confirmed issuers retain full responsibility for processing redemptions even if they outsource operational tasks to third parties. Issuers will not earn interest on deposits held at the Bank of England, but are permitted to offer activity-based rewards and loyalty benefits to stablecoin holders Bank of England policy statement.
For example, a user submitting a £10,000 redemption request at 10 a.m. on a weekday will have the funds returned to their linked bank account by the close of business that same day, per the final rules.
Two-Tier Supervisory Framework for UK Stablecoins
HM Treasury will make the formal designation of which stablecoins qualify as systemic, triggering joint Bank of England and FCA oversight. Non-systemic stablecoins used for cryptoasset trading will remain under FCA supervision alone. This split creates a two-tier market structure for the first time in the UK. Systemic stablecoins fall under the Bank’s enhanced regime with stricter backing and redemption rules, while trading tokens stay subject to the FCA’s existing cryptoasset regulatory framework Bank of England policy statement.
2027 Launch Timeline and Draft Code of Practice Feedback Deadline
Feedback on the draft Code of Practice for systemic stablecoin issuers closes on September 22, 2026 Bank of England policy statement. The Bank intends to publish supporting regulatory materials and a joint FCA publication outlining end-to-end supervision requirements for systemic stablecoins shortly after the feedback period ends.
Two milestones will determine whether UK-issued pound-denominated systemic stablecoins reach market in 2027: the September 22, 2026 feedback deadline for the draft Code, and the end-2026 target for finalizing the Code of Practice. Delays to either milestone could push the launch of regulated UK payment stablecoins into 2028 or later Bank of England policy statement Bank of England news release.
