The Bank of England has scrapped plans for individual holding caps on stablecoins, with a revised regulatory framework now scheduled to take effect in 2027, according to a policy update reported by Global Government Finance.

The change reverses a core element of the Bank's earlier consultation on systemic payment stablecoins, which had proposed per-person limits on retail holdings of sterling-denominated tokens. The original cap was intended to constrain the substitution of commercial bank deposits with privately issued digital money at the household level, and to limit the speed at which a stressed stablecoin could drain reserves in a bank run scenario.

What changed in the framework?

Under the revised approach, the BoE will focus on issuer-level prudential standards rather than household ceilings. Regulatory attention will shift to reserve-asset composition, redemption guarantees, capital buffers and custody segregation, according to the report. The 2027 date pushes implementation roughly two years past the Bank's previously announced 2025 target, a delay officials have linked to coordination with the Financial Conduct Authority and His Majesty's Treasury on adjacent cryptoasset rules and the wider payments reform agenda.

The Prudential Regulation Authority is leading the technical work, alongside the Bank's financial stability directorate. The two arms have been jointly drafting the supervisory framework for firms seeking authorisation to issue systemic stablecoins in the UK.

Why the shift?

The removal of personal caps suggests the Bank has concluded that issuer supervision can deliver the same financial-stability objective as a retail ceiling, with less operational friction. Enforcing a per-wallet or per-customer limit across a tokenised payment system would have required identity infrastructure and on-chain monitoring capabilities the Bank has not signalled it intends to mandate.

Industry participants had argued throughout the consultation process that holding caps would effectively block institutional use cases — corporate treasury, cross-border settlement and tokenised securities — that are central to the Bank's wider tokenisation agenda. Several major payment processors and commercial banks had warned in response to the original consultation that the per-person threshold was incompatible with wholesale settlement flows.

What are the open questions?

The updated framework leaves several parameters undefined. The Bank has yet to set the threshold at which a stablecoin crosses into "systemic" supervision, nor has it confirmed the size of issuance programmes that would trigger enhanced prudential requirements. The treatment of foreign-issued tokens operating in the UK market also remains under review, particularly the equivalence arrangements that would apply to issuers authorised under the EU's Markets in Crypto-Assets (MiCA) regime.

The 2027 effective date will arrive well after the Financial Stability Board's global baseline implementation deadline for stablecoin regulation, which G20 member jurisdictions committed to put in place by the end of 2025. The Bank is expected to publish transitional provisions that allow existing issuers to continue operating under interim permissions while authorised firms come up to the new standard.

What should market participants watch?

The next material step will be the BoE's consolidated consultation paper, expected to set out the issuer-level prudential rules, the redemption guarantee mechanism and the final definition of systemic scope. The closing date for that consultation, and the Bank's position on non-UK stablecoin issuers seeking access to the British market, will set the practical timeline for firms planning authorisation before 2027.

The Treasury's parallel work on the financial services and markets regime, due in the same window, will determine whether stablecoin issuance falls inside or outside the perimeter of regulated activity — a structural question that could reshape the competitive position of UK-domiciled issuers relative to their European counterparts.