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Could the UK Become Crypto’s Stablecoin Hub?

What happened
Based on Bitfinex Blog · Jun 26, 2026

The Bank of England replaced proposed individual stablecoin holding limits with a £40 billion issuer-level cap, aiming to balance financial stability with utility. The shift contrasts with the EU’s stricter MiCA regime, which enters full enforcement on 1 July 2026.

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Could the UK Become Crypto’s Stablecoin Hub?
Bitfinex Blog — Bitfinex
Key points
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The Bank of England has abandoned proposed individual holding limits for systemic sterling stablecoins, moving instead to a £40 billion issuer-level cap.
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On the eve of MiCA entering full enforcement in the EU, the UK is positioning itself as a more flexible alternative.
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The question now is whether this approach can regulate stablecoins without weakening their utility as payment and settlement infrastructure.
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The latest proposals on stablecoins by the Bank of England, the UK’s central bank, mark a clear retreat from an earlier, more restrictive stance and could open the country up to being a more welcoming environment for crypto businesses.
Key numbers
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The Bank of England abandoned earlier plans to cap individual holdings of systemic sterling stablecoins at £20,000 for individuals and £10 million for businesses, replacing them with a £40 billion issuer-level limit.
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Under the revised framework, issuers may hold up to 70% of reserve assets in short-term UK government debt and 30% in unremunerated deposits at the Bank of England, up from a 60-40 split proposed in November 2025.
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The Bank of England replaced proposed individual stablecoin holding limits with a £40 billion issuer-level cap, aiming to balance financial stability with utility.

The Bank of England abandoned earlier plans to cap individual holdings of systemic sterling stablecoins at £20,000 for individuals and £10 million for businesses, replacing them with a £40 billion issuer-level limit. This change reflects feedback that user-level restrictions would have imposed impractical operational burdens, potentially rendering stablecoins unusable despite their intended role as payment infrastructure. The decision follows a House of Lords report urging a reassessment of the approach to address financial-stability risks without undermining commercial viability.

Under the revised framework, issuers may hold up to 70% of reserve assets in short-term UK government debt and 30% in unremunerated deposits at the Bank of England, up from a 60-40 split proposed in November 2025. This adjustment aims to improve the commercial case for regulated stablecoin issuance by allowing greater reliance on interest-bearing assets. The policy statement, issued on 22 June, signals the UK’s intent to create a more flexible regulatory environment compared to the EU’s forthcoming MiCA requirements.

The EU’s Markets in Crypto-Assets Regulation (MiCA) will enter full enforcement on 1 July 2026, with no grace period for firms lacking full authorisation. MiCA imposes stringent obligations on stablecoin issuers, including authorisation as credit institutions or Electronic Money Institutions, European Banking Authority supervision for significant tokens, and restrictions on non-euro stablecoins used as payment methods. The regime prioritises harmonised market access but raises compliance barriers for offshore and crypto-native firms.

The UK’s emerging framework contrasts with the EU’s approach by focusing on issuer-level caps and reserve flexibility, aligning with stablecoins’ operational needs as payment infrastructure. However, the UK’s rules remain in draft form until at least late 2026 and are not expected to take effect until 2027. Firms must weigh the UK’s flexibility against the EU’s immediate market access and the regulatory approaches of other jurisdictions, such as Singapore, Dubai, Hong Kong, and the US, when determining where to establish operations.

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