11

November

2025

Bank of England introduces draft regulatory framework for stablecoins

On November 10, 2025, the Bank of England (BoE) published a consultation paper on a regulatory regime for sterling pound-denominated payment stablecoins. The paper confirms a two-pillar model for oversight under which His Majesty’s Treasury (HMT) would have the authority to designate systemic stablecoin arrangements (stablecoin issuers, payment systems, and related service providers deemed systemically important under the Banking Act 2009) and the BoE would retain supervisory authority over such arrangements. Under this framework, the Financial Conduct Authority (FCA) would separately oversees non-systemic stablecoins, conduct standards, and custody requirements.

The proposal outlined in the BoE’s consultation paper would require systemic issuers to hold at least 40% of backing assets as non-interest-bearing deposits at the BoE and up to 60% in short-term U.K. treasury bills, with a transitional option for designated issuers to hold up to 95% in government debt before moving to this mix. The proposal also introduces holding limits of £20,000 per individual and £10 million per business, subject to exemptions for firms with higher operational needs, and it treats these caps as temporary measures to manage transition and funding risks, contemplating central bank liquidity backstops for solvent systemic issuers. The consultation paper is open for comment until February 10, 2026, with a final framework anticipated in the second half of the year.

Th BoE’s proposal reflects, and attempts to formalize, the key themes outlined in BoE Executive Director Sasha Mills’s speech from October 8, 2025, including a systemic stablecoin perimeter, defined reserve structures, potential holding limits, and Real-Time Gross Settlement (RTGS) synchronization and Digital Securities Sandbox (DSS) integration, designed to operate alongside the FCA’s forthcoming rules on stablecoin issuance, custody, and prudential supervision. Taken together, the BoE consultation paper and FCA rulemaking indicate a strong push in the U.K. to bring payment-scale sterling stablecoins within a clear prudential perimeter aligned with standards developed by the Financial Stability Board (FSB) and the Bank for International Settlements (BIS) and are broadly consistent with emerging regimes under the U.S.’s GENIUS Act, the EU’s Markets in Crypto-Assets (MiCA) Regulation, and the Monetary Authority of Singapore’s (MAS) emerging stablecoin regulatory framework.

Last Updated 11/11/2025.


United Kingdom (Regulatory)

History:

  • Nov 10, 2025: The BoE publishes a consultation paper on a regulatory regime for sterling pound-denominated stablecoins, outlining reserve composition, temporary holding limits, and a 2-pillar framework under which HMT designates systemic stablecoin issuers and payment systems, the BoE supervises their prudential soundness and operational resilience, and the FCA regulates non-systemic stablecoins and conduct. Consultation Paper.
  • Oct 8, 2025: BoE Executive Director Sasha Mills outlines a forthcoming regime for systemic stablecoins pegged to the British pound, confirming a BoE consultation later in 2025 and coordination with the 2025 stablecoin consultations conducted by the U.K.’s FCA.
  • Jul 31, 2025: The consultation period for industry comment on CP25/14 closes.
  • May 28, 2025: The FCA releases Consultation Paper CP25/14 proposing a regulatory framework for “qualifying stablecoins” issued in the U.K. CP25/14.
See the Consultation Paper
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Tom Momberg

+17186645458 tom.momberg@dlxlaw.com

Tom advises clients in an array of matters related to blockchain technology, decentralized finance, banking and payments systems, financial products, and financial technology applications. He joined DLx Law as an attorney after working as in-house counsel for a payments and banking software service provider, advising on various legal and regulatory matters, operations, risk, customer due diligence, and corporate best practices.

Tom received his J.D. from George Mason University Law School in Virginia and his B.A. from the University of Wisconsin-Milwaukee. Tom is a former journalist, and, while in law school, he interned for DLx Law and served as a law clerk for several federal institutions in Washington, D.C., including the CFTC, FCC, and House Judiciary Committee. Tom is admitted to practice law in the District of Columbia and the State of Oregon.

Angela Angelovska-Wilson

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Angela is an early distributed ledger technology adopter and a leading authority in the evolving global legal and regulatory landscape surrounding distributed ledger technology and smart contracts. Prior to co-founding DLx Law, Angela served as the Chief Legal & Compliance Officer of Digital Asset and was part of the founding team.

Prior to joining Digital Asset, Angela was a partner at Reed Smith where she regularly advised clients on the implementation of new technologies to finance and the complex regulatory schemes involved in the development, creation, marketing, sale and servicing of various financial services and products. Before Reed Smith, Angela spent most of her career in various roles at Latham & Watkins, where she was recognized by The Legal 500 US among the top finance attorneys in the U.S.

Angela has a deep understanding of the Fin-Tech industry and in particular the distributed ledger industry, having been involved in a number of startups in various roles, as an employee, entrepreneur and advisor. In addition to DLx Law, Angela is also co-founder of Sila Inc., an innovative technology company.