Bank of England drops strict stablecoin holding limits, sets $50B cap

The Bank of England has officially abandoned its controversial plan to impose strict holding limits on stablecoins, bowing to pressure from a House of Lords committee and the crypto industry.

The central bank said Monday it will scrap its proposed £20,000 ($27,000) limit on individual holdings and a £10 million cap for corporations. Instead, the BOE will implement a "temporary issuance guardrail" that caps the total circulation of any single systemic stablecoin at £40 billion ($50.6 billion). The bank also reduced to 30% the amount of backing assets that must be held in central deposits yielding no interest, a move that eases operational burdens on issuers.

For cryptocurrency and digital asset traders, the policy reversal removes a major regulatory overhang that had threatened to stifle stablecoin adoption in the UK. Stablecoins are a critical on-ramp for crypto markets, and restrictive holding limits could have driven liquidity away from UK-based platforms. The new issuance cap, while still a constraint, is far more permissive than the original proposal and aligns more closely with industry expectations. Traders can check NowPrice's crypto page for real-time pricing on major stablecoins and related assets.

Looking ahead, market participants will watch for the final regulatory framework from the BOE and the Financial Conduct Authority, which will determine how the guardrail is enforced and whether it applies to foreign-issued stablecoins. The UK's approach may also influence regulatory discussions in other jurisdictions, including the EU and the US, as stablecoin legislation continues to evolve globally.