Haciyev Reşit 
The United Kingdom is preparing a new regulatory framework for stablecoins aimed at ensuring the safe and sustainable growth of digital finance. Planned for completion by 2025, the framework developed by the Bank of England will impose holding limits of £20,000 for individual users and £10 million for corporate entities. Rather than restricting stablecoin usage entirely, the regulations aim to maintain market stability and manage systemic risks.
Bank of England Introduces New Stablecoin Framework
According to Bloomberg, the Bank of England is working on a draft regulation that includes temporary asset caps for stablecoin holders. Individuals will be permitted to hold up to £20,000, while businesses will be limited to £10 million in stablecoin assets. Sources familiar with the matter said these caps are not permanent bans, but part of a phased adaptation process.
Deputy Governor Sarah Breeden explained:
“The UK is taking steps in parallel with the U.S. to establish its digital currency regime. These limits are temporary and designed to maintain market stability until the regulatory landscape matures.”
Breeden emphasized that the main objective is to strike a balance between innovation and financial security.
Why the UK Is Taking a Cautious Approach
The UK’s measured stance stems from the structural differences in its financial system. While much of the U.S. mortgage and credit market is securitized, the UK’s system relies heavily on direct commercial bank lending. This makes the British financial sector more sensitive to liquidity fluctuations.
Regulators are therefore closely monitoring how the rapid growth of stablecoins could affect bank liquidity and monetary policy. The new stablecoin framework will form part of a broader “Digital Finance Safety Plan” expected to be finalized by late 2025. It will include internationally aligned standards such as:
- 1:1 reserve backing,
- asset transparency, and
- issuer supervision requirements.
The Global Stablecoin Regulation Race
The UK’s move aligns with a broader global regulatory effort to establish transparent, collateralized, and supervised digital money systems.
United States:
The U.S. Treasury and Federal Reserve are developing bank-like oversight models for major stablecoin issuers such as Circle (USDC) and Tether (USDT).
Bills like the Payment Stablecoin Clarity Act propose strict requirements for reserve transparency and routine audits, aiming to make stablecoins reliable digital payment instruments.
European Union:
The Markets in Crypto-Assets (MiCA) framework, set to take effect between 2024 and 2025, establishes Europe’s leadership in this area.
MiCA mandates 1:1 reserve collateral, restrictions during liquidity crises, and comprehensive supervision for issuers — setting what experts call “the first global regulatory standard.”
Asia:
Across Asia, similar regulatory momentum is visible.
Japan legalized stablecoins in 2023, allowing issuance only by licensed banks or trust companies.
Meanwhile, the Monetary Authority of Singapore (MAS) is building a new licensing framework for digital payment tokens, aiming to ensure clarity and consumer protection without stifling innovation.
The UK’s Goal: Becoming a Safe Digital Finance Hub
The Bank of England’s stablecoin framework aims to position the UK as a trusted and competitive global center for digital finance. Bank of England Governor Andrew Bailey previously stated at a G20 meeting:
“As stablecoins integrate into the global financial system, transparency and oversight must remain non-negotiable. Consumer protection and financial stability come first.”
The UK’s 2025 plan seeks to build a balanced regulatory model that safeguards users while leaving room for crypto innovation. Analysts believe this could make Britain a “high-standard yet innovation-friendly” digital finance hub.
A New Era in Crypto Regulation
The UK’s stablecoin regulation plan marks a critical step in the maturation of digital money markets. The £20,000 individual and £10 million institutional limits are designed to manage early-stage risks and strengthen public trust. Experts predict that by 2025, these rules will help establish a collaborative ecosystem where crypto firms and traditional financial institutions can operate side by side under a unified, transparent framework.
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