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

The Bank of England is reviewing stablecoin-related limits after feedback that current rules may be overly restrictive. The BoE proposed capping individual ownership of sterling-based stablecoins at 20,000 pounds per coin and limiting businesses to 10 million pounds to reduce risks of large bank deposit outflows. Deputy Governor Sarah Breeden said the central bank is open to alternative ways to manage stablecoin risks. The BoE is also reconsidering a requirement that at least 40% of assets backing a UK stablecoin be held as central bank deposits earning no interest, with the rest in sovereign bonds and other liquid assets. Breeden linked the 40% level to withdrawal pace observed during 2023 bank stress events and said the BoE will reassess whether it was too conservative. She also indicated no urgency to raise rates in June or July 2026.

"“We are genuinely open to thinking whether there are other ways of achieving our objective,” she told the FT. 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. Industry groups called those limits operationally cumbersome, and Breeden acknowledged the criticism directly."

"“We will look hard to see if we have been overly conservative in our thinking there,” Breeden said. The BoE is 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, affecting stablecoin profitability because the requirement is stricter than U.S. rules."

"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. She said the BoE is looking very hard at whether there are different ways to manage what it thinks is an important risk as stablecoins come into play. The 40% figure came from studying the pace of withdrawals during the 2023 Silicon Valley Bank collapse and other recent stress events."

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