The Next Step in Stablecoin Regulation Is in the United Kingdom The Bank of England has published draft rules for sterling-denominated systemic stablecoins. Previously proposed per-person holding limits have been removed, replaced instead with a temporary issuance cap of £40 billion per stablecoin. The framework covers tokens widely used in payments that could threaten financial stability if they fail. The framework also includes concrete obligations: issuers are permitted to hold 70% of their reserves in short-term government bonds, while the remaining 30% must be held as non-interest-bearing deposits at the central bank. Paying interest to stablecoin holders is prohibited, but usage-based rewards such as spending and transfers are allowed. The timing of this move is notable. Following steps taken by the United States with the GENIUS Act and the European Union with its MiCA framework, the United Kingdom is now establishing its own stablecoin regime. Initial industry assessments have viewed the framework as robust, though the extent to which the issuance cap is truly “temporary” remains an open question. The rules are expected to be finalized by the end of 2026, with issuers anticipated to begin operations in 2027.