The Bank of England’s (BOE) stance on sustainability is becoming friendlier, but constructive dialogue with the industry is still lacking, according to the bank’s deputy governor.
The Bank of England launched a consultation on stablecoins last November. Some of the proposed requirements drew the ire of crypto industry representatives, who claimed they could stifle innovation.
Over the past few months, the bank has worked with industry groups to develop its position on sustainability. These include revising support requirements and revising account limits.
Some industry observers believe that the bank is coming around to stablecoins, but there is still work to be done.
The Bank of England is open to feedback on stablecoin risk
On November 10, 2025, the BOE published a document outlining its vision for a stablecoin regulatory regime. It comes two years after an initial discussion paper, which the bank said included perspectives from “banks, non-bank payment service providers, payment system operators, trade associations, academia and individuals”.
At the time, industry observers told Cointelegraph that the BOE was overstating the perceived risks that stablecoins posed to the UK economy. Tom Rhodes, chief legal officer of UK-based stablecoin issuer Agant, said at the time that the bank had been “disproportionately cautious and restrictive”.
One of the more controversial measures was the stablecoin holding limits, which are 20,000 pounds for individuals and 10 million pounds for businesses accepting it as a form of payment.
Now, it looks like the bank is coming around. Speaking before the House of Lords Financial Services Regulation Committee on Wednesday, BOE Deputy Governor Sarah Breeden told MPs it was prepared to review those limits.
Breden said the proposed restrictions are meant to reduce the risk of large deposits migrating to stablecoins, which has the potential to destabilize banks.
“We have proposed keeping the limit as a way to manage this risk. We are open to feedback on other ways to achieve it,” he said.
But the feedback itself also seems to be an issue, at least according to Breeden. He said, “The pressure from the industry to do it differently is very real. What we were a little disappointed about was that someone said, ‘Why not?'”
“I don’t think we’ve had any constructive engagement yet in a different way to solve the problem that I would have hoped for. Instead, what we’ve had is ‘don’t do it’ and ‘I understand why you want to do something’ as opposed to filling in the blanks.”
That’s not necessarily the case, Rhodes told Cointelegraph on Thursday. “Over the past two years we have reviewed thousands of pages of FCA and Bank advice, attended numerous roundtable meetings and submitted hundreds of pages both ourselves and as trade associations.”
He said the main challenge for the industry and regulators is that they are developing a “comprehensive regulatory regime for a market that has yet to develop”.
Rhodes explained:
“In the circumstances it is not possible to provide specific information, so lighter modes are appropriate for tactile principles at this new stage.”
Nick Jones, founder and CEO of UK-based digital asset platform Zumo, said, “Industry groups have been working hard and under tight deadlines to come up with real recommendations.”
He said feedback could be more constructive if the bank followed the Financial Conduct Authority’s (FCA) spring model. These fun workshops focus on the practical application of technology to answer questions from regulators.
The ‘multi-moneyverse’ and what it means for stablecoins in the UK
Breeden opened his remarks by asserting that at the bank, “we want to see tokenized money being issued by non-banks.”
“We can have what I call ‘multi-pool’ with more choice and competition today.”
He said in a September speech that such a system would be “characterized by a choice of different forms of money and payment; by technology to promote faster, cheaper and more innovative payments for the benefit of businesses, households and users of financial markets; and, critically, by the entire system relying on money itself.”
Inter-currency competition and its perceived benefits have been a key driver of the crypto industry. Rhodes said, “Stablecoins being part of a competitive multi-party world represent a significant and positive evolution in the Bank’s thinking.”
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However, Rhodes noted that this is a “stark contrast” to BOE Governor Andrew Bailey’s statement, where “he does not see stablecoins as a substitute for commercial bank money.”
Jones said, “Over time, we’ve seen the Bank of England’s skepticism about digital assets disappear.” It is “encouraging” that the central bank is accepting more competitive forms of money and that stablecoins backed by the pound sterling can coexist with fiat money.
“It’s clear that different emerging types will suit different use cases – for example, large institutional capital is more comfortable with tokenized deposits, while smaller retail payment companies can take advantage of the network effects of stablecoins,” he said.
The next step, Rhodes said, is the BOE’s final policy position, but revisions are still possible.
The industry is still trying to get rid of bank-like holding caps and capital rules for issuers. Jones said the latter “are inappropriate for fully supported issuers and should be replaced with controls focused on resource quality and transparency.”
They also want resources to be revised. Until now, the BOE requires issuers to hold 40% of reserve assets in non-remunerative deposits with the Bank of England and up to 60% in high-quality short-term UK government debt.
This is based on past eras such as the collapse of Silicon Bank in 2023, which resulted in the loss of the USDC stablecoin. Breeden told Reuters, “those numbers are broadly in line with that. So we’re proposing a lower number of 40% instead.”
“Regulators should consider paying a 40% stake in the Bank of England to help maintain business viability,” Jones said.
“The UK can be one of the leaders in stablecoins, but only if regulation is proportionate and competitive.”
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