The Bank of England is reopening its proposed framework for systemically important sterling stablecoins after industry participants labeled the draft rules operationally unworkable, with Deputy Governor Sarah Breeden telling the Financial Times that the central bank is "looking very hard" at alternative approaches.

The November consultation would cap individual holdings at £20,000 ($27,000) and business holdings at £10 million ($13.5 million). It would also require issuers to place at least 40% of reserves at the BoE without earning interest, with the remainder held in short-term UK government debt or other liquid assets.

Breeden acknowledged that feedback on the holding-limit design had been blunt. "What we have heard from industry is that the way we have proposed to implement limits is cumbersome operationally for a temporary measure," she said. "So we are genuinely open to thinking whether there are other ways of achieving our objective."

Which parts of the framework are under review?

Two. The proposed per-user and per-business ceilings, and the 40% interest-free reserve mandate that the BoE designed drawing on lessons from past financial crises. Breeden said the bank would assess whether the reserve floor had been "overly conservative," and noted that industry issuers prefer a higher share of interest-earning assets.

The remaining architecture — the categorization of issuers as "systemic," the Financial Conduct Authority's continued oversight of non-sterling and crypto-trading stablecoins such as USDT and USDC, and the limited-eligible-asset list — is not under active revision, according to Breeden's remarks.

What is the industry asking for?

In March, Coinbase's then-vice president for international policy, Tom Duff Gordon, told the House of Lords Financial Services Regulation Committee that the proposed holding caps would prevent sterling stablecoins from scaling into settlement infrastructure for tokenized markets. Settlement and treasury use cases require per-firm balances that the £10 million ceiling would clip at the moment they become commercially useful, he argued.

George Morris, a digital assets partner at law firm Simmons & Simmons, welcomed the BoE's apparent flexibility but warned that parallel proposals from HM Treasury and the FCA could still constrain the market. Morris singled out the prospect of full FCA authorization for merchants integrating payment layers backed by non-UK stablecoins — a route he said could complicate foreign issuance partnerships more than the BoE caps themselves.

How does the UK regime compare with US stablecoin legislation?

The reassessment lands as Washington finalizes its own perimeter. The GENIUS Act, signed into law in July by President Donald Trump, requires issuers to maintain full reserve backing and to publish monthly disclosures. The Senate Banking Committee is also scheduled to mark up the CLARITY Act, which would establish a market-structure framework for digital assets.

The two regimes diverge sharply on demand-side controls. The UK proposal imposes per-account holding caps; the GENIUS framework instead leans on issuer-level reserve, redemption, and disclosure obligations. That asymmetry could steer institutional issuance toward US-aligned structures if the BoE retains caps in any revised form.

What happens next?

The BoE has not published a revised consultation date. Breeden's comments point to either an amended consultation paper or a supplementary technical note before the bank designates any sterling stablecoin as systemic. Until then, the November consultation remains the operative reference document for industry engagement, with parallel Treasury and FCA proposals on broader crypto-asset regulation still working through the policy pipeline.