The Bank of England (BOE) has set out its proposed stablecoin regulatory regime, confirming plans to impose limits on holdings per coin.

The U.K.'s central bank said on Monday it is proposing "temporary" limits of 20,000 pounds ($26,300) per coin for individuals and 10 million pounds for businesses.

The BOE added that these limits would be removed once the financial system has transitioned to the incorporation of stablecoins, digital tokens pegged to the value of a traditional financial (TradFi) asset such as a fiat currency.

As previously reported, the BOE may also exempt businesses who need to hold large balances, such as crypto exchanges and even supermarkets, according to the consultation paper.

The BOE's plans to introduce holding limits was met with criticism from some cryptocurrency groups, who branded them unworkable, when they were first reported in September.

The industry groups warned that the U.K. would have stricter rules than jurisdictions such as the U.S. or the European Union (EU), possibly making it a less attractive market in which to do business.

Sarah Breeden, the BOE's deputy governor for financial stability, said recently that these limits were required to curb the risk of destabilizing the commercial banking sector, which most people rely on for mortgages.

"These proposed steps, whilst looking harsh at first glance, will benefit systemic stablecoins in the medium and long term to become a trustworthy method of value exchange and a true alternative to current forms of digital money," Etay Katz, head of digital assets at law firm Ashurst, said in an emailed comment.

Bank of England's Stablecoin Backing Proposals

The BOE also proposed stablecoin issuers being able to hold up to 60% of their backing assets in short-term U.K. government debt with the other 40% provided through unrenumerated Bank of England accounts.

An exemption to this framework, however, is issuers of stablecoins transitioning to becoming systemic, who would be able to hold 95% of their backing assets in short-term debt to support their early growth.

The central bank pointed out that its proposed framework only applies to "sterling-denominated systemic stablecoins" — digital tokens pegged to the U.K.'s currency that can be used for retail payments and wholesale settlement. Stablecoins used for non-systemic purposes, such as trading cryptoassets, would be regulated by the Financial Conduct Authority (FCA), the BOE said.

The BOE's proposals are now open for consultation until Feb.10 2026, after which it will finalize its rules, setting out detailed requirements for stablecoin issuers, later in 2026.