---
title: "BoE weighs stablecoin guardrail alternatives ahead of draft rules"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/286890798.md"
description: "The Bank of England is reconsidering strict holding limits on stablecoins, potentially introducing temporary guardrails on issuance instead. Deputy Governor Sarah Breeden stated that these measures could address credit provision concerns while reducing costs. The BoE plans to release draft rules next month, aligning with US developments, and will allow banks to issue stablecoins under specific conditions. The aim is to balance innovation in digital payments with financial system stability."
datetime: "2026-05-19T10:02:20.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/286890798.md)
  - [en](https://longbridge.com/en/news/286890798.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/286890798.md)
---

# BoE weighs stablecoin guardrail alternatives ahead of draft rules

The Bank of England said on Tuesday it is reconsidering strict holding limits on stablecoins and may instead introduce temporary guardrails on issuance, as regulators prepare to release draft rules for the sector next month.

Speaking at CityWeek 2026, Deputy Governor Sarah Breeden said temporary guardrails on the total amount of stablecoins issued could help address concerns surrounding the impact on credit provision while reducing costs for the sector compared to holding limits.

The comments come after the central bank previously proposed caps of 20,000 pounds ($26,786) per individual and 10 million pounds per business for sterling stablecoins widely used in everyday payments.

The proposal drew criticism from crypto firms, which argued that the restrictions were among the toughest globally.

## BoE reviews stablecoin restrictions

Stablecoins are digital assets that are typically pegged to the US dollar or another major currency.

They are designed to maintain a fixed value and are increasingly being positioned as alternatives to traditional banking systems for domestic and cross-border payments.

The BoE has repeatedly raised concerns about the risks associated with rapid adoption of stablecoins.

Officials fear that large-scale movement of deposits from banks into stablecoins could weaken financial stability and potentially lead to a reduction in credit availability.

Breeden said the central bank is now evaluating whether temporary issuance controls may be more effective and less disruptive than directly limiting how much stablecoin users can hold.

The cryptoasset industry has argued that the BoE’s earlier proposals could restrict innovation and place the UK at a disadvantage compared with other jurisdictions that are developing digital asset regulations.

## Draft rules due next month

Breeden said the BoE will release draft rules next month and aims to finalise the framework by the end of the year.

According to Breeden, the timeline is being aligned in line with the US timeline, indicating that British regulators are monitoring developments in the United States as they shape their own stablecoin regime.

The upcoming rules are expected to provide more clarity on how stablecoins can operate within the UK financial system and what safeguards issuers will need to maintain

## Banks allowed to issue stablecoins

Breeden also said banks will be permitted to issue stablecoins under certain conditions.

She stated that banks can issue stablecoins as long as the digital assets are issued through a non-deposit-taking entity and use distinct branding that can still reference the parent bank’s brand.

The approach appears aimed at ensuring separation between traditional banking activities and stablecoin issuance while still allowing financial institutions to participate in the digital asset market.

The BoE’s latest comments suggest policymakers are attempting to strike a balance between supporting innovation in digital payments and limiting potential risks to the wider financial system.

The post BoE weighs stablecoin guardrail alternatives ahead of draft rules appeared first on Invezz

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