The Bank of England released its policy statement and draft Code of Practice for systemic stablecoin issuers Monday, signaling a shift in how it will gate-keep the sector. The regulator scrapped the per-person holding caps it proposed last year in favor of issuer-level issuance ceilings and a more flexible approach to what counts as a backing reserve.
Systemic stablecoins—those deemed critical to financial stability—face the toughest rules. The issuer ceiling works differently than the old per-holder model: instead of capping how much any single user could hold, the BoE now caps the total amount an issuer can put into circulation. That removes a churn point that would have forced users to split holdings across accounts or wallets, a friction that many operators flagged as unworkable.
The reserve-asset mix loosens significantly. Rather than restricting backing exclusively to narrow categories, the BoE now permits a broader toolkit: cash, securities, and other high-quality liquid assets can shore up a stablecoin's promise to redeem. This aligns more closely with what most major operators already maintain, though it requires issuers to demonstrate they can actually liquidate reserves under stress.
The distinction between systemic and non-systemic stablecoins matters operationally. Systemic issuers face the full Code of Practice playbook: capital requirements, governance boards, redemption mechanics, and ongoing prudential oversight. Non-systemic ones get a lighter touch, though the BoE reserves the right to reclassify upward if an issuer's footprint grows.
The feedback window remains open, though the BoE has not yet published an explicit deadline for comment. Industry participants have months to parse the draft language and file objections or clarifications. The actual rule-making timeline—when the Code becomes binding—has not been announced.
The shift from per-holder caps to issuer ceilings reflects a practical reset. The old model would have made high-volume stablecoins administratively painful for everyday use and would have created arbitrage incentives across jurisdictions. By moving the throttle to the issuer level, the regulator keeps a hand on systemic risk without micromanaging user behavior. But it also places larger trust in issuers' own risk management, since systemic stablecoins will carry more volume under fewer oversight levers than the original proposal sketched.