The Bank of England (BoE) has signaled a significant shift in its approach to digital currency regulation, indicating it is “genuinely open” to revising the strict holding limits previously proposed for “systemic” stablecoins. Speaking before the House of Lords Financial Services Regulation Committee on March 11, 2026, Deputy Governor Sarah Breeden admitted that the central bank is willing to consider alternative methods for safeguarding financial stability. This marks a major pivot from the BoE’s November 2025 stance, which sought to impose a £20,000 limit for individuals and a £10 million cap for businesses to prevent a “disorderly transition” of deposits away from traditional banks.
The proposed caps have faced intense pushback from the crypto industry and legal analysts, who argue that such restrictions make a commercially viable sterling stablecoin market “structurally impossible.” Critics point out that tracking individual holdings across decentralized secondary markets is an operational nightmare, while the £10 million business limit effectively kills high-value use cases like wholesale financial settlement and corporate payroll. In response, Breeden acknowledged these technical hurdles, expressing disappointment that industry critics had not yet proposed a concrete “alternative way” to mitigate the risk of bank deposit flight—the central bank’s primary fear.
As the UK races to establish itself as a global crypto hub, the BoE is walking a tightrope between innovation and stability. While the central bank has already moved to allow issuers to hold 60% of their backing assets in yield-bearing UK government debt (a major win for profitability), the “holding cap” remains the final hurdle for mass adoption. Updated draft rules are now expected in June 2026, with a final regulatory framework slated for the end of the year. For now, the message to the industry is clear: the Bank is listening, but it won’t remove the “safety brakes” unless the private sector can prove the financial system won’t skid out of control.
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