Over a month ago, on 19 May, Sarah Breeden, Deputy Governor of the Bank of England for Financial Stability, used a speech to give a clear signal: the Bank had decided to rethink some of the more controversial aspects of its proposals for the regulation of systemic stablecoins, especially on holding limits (that is, maximum amounts of a particular stablecoin that an individual or business could hold) and on the composition of the assets used to back the stablecoin and ensure its 1:1 peg to sterling.
The Policy Statement and draft Code of Practice (CoP) were published on 22 June 2026, with the consultation on the CoP open until 22 September 2026, and Deputy Governor Breeden’s trailing of certain “rethinking” has been borne out. Moreover, regular readers will recall that the Bank had already softened (in its consultation paper preceding the Policy Statement) some of the early thinking it had previously conveyed in its November 2023 discussion paper.
As the draft CoP sets out the proposed rules and related guidance that will implement the final policy positions reached by the Bank, stakeholders are encouraged to review the details of the CoP carefully within the consultation time-frame to ensure that they adequately, appropriately and clearly reflect the relevant positions set out in the Policy Statement.
The Bank’s engagement and willingness to modify policy on complex issues, in response to a transparent and considered process, are laudable. It is also a key step forward, and indeed a significant symbol of institutional support for stablecoins, that we have confirmation that systemic issuers will have access both to Bank of England accounts and to a liquidity facility it will provide. These are highly sought-after services indeed. However, our most succinct summary of the Bank’s final policy position is that it has made several incremental shifts that are ostensibly helpful to the UK stablecoin ecosystem, but without truly changing its mind on the philosophical approach to the risks that it considers come with systemic stablecoins.
This means that there remain tough questions about whether this regime will ultimately permit the emergence of a vibrant and competitive GBP stablecoin market; and this in turn means that these publications are of critical importance to any firm wishing to issue or use systemic sterling-denominated stablecoins, or invest in such a firm.
It is striking that other developments driven by parts of the Bank, including the Prudential Regulation Authority (PRA), highlight a continuing tension. On the one hand, there have been supportive statements about helping innovation flourish, but on the other, the Bank’s policy stances appear to flow from deeply-held concerns about systemic and other risks associated with stablecoins.
Before discussing what has and has not changed in the Bank’s final policy position, we begin by looking at the question of scope.