Bank of England Vows to Synchronize Stablecoin Regulations with US

The Bank of England has pledged to align its stablecoin regulatory framework with the United States, as revealed by Deputy Governor Sarah Breeden during a digital finance event in London on November 5, 2025. This initiative aims to address market stability concerns and ensure synchronization with international standards, impacting systemic stablecoin issuers and market practices.

Breeden, the Deputy Governor for Financial Stability, emphasized the importance of a coordinated approach, stating, "Our aim is to make sure that our regime is up and running, just as quickly as the US. It is really important that we do this together, and it’s a fabulous opportunity." A formal consultation on the new rules is scheduled to open on November 10, 2025, marking a significant step in the UK's regulatory efforts.

Under the proposed framework, the Bank of England will impose temporary caps on stablecoin holdings: £20,000 for individual users and £10 million for businesses. These limits are designed to ensure a "safe and orderly introduction" of regulated digital currencies, reflecting structural differences in liquidity dynamics between the UK and US markets.

The regulations will apply exclusively to "systemic" stablecoins used in large-scale or critical payment systems, while excluding those primarily facilitating crypto trading or speculative activities, which are deemed to pose limited systemic risk. Breeden clarified, "This is not about regulating every token in existence. It’s about ensuring that the stablecoins people use for real-world payments meet the same standards as traditional money."

Close coordination with the United States is facilitated through the UK-US Digital Assets and Capital Markets Task Force, established in September 2025, to harmonize legal standards and prevent regulatory arbitrage. The UK's approach will mirror key aspects of the US GENIUS Act, requiring stablecoin reserves to be held entirely in short-term government debt or Treasury bonds.

Potential impacts include increased compliance costs, rearranged capital flows, and possible reduced liquidity in the stablecoin sector. The Bank is considering special measures, such as liquidity facilities, to backstop trusted issuers. Historical context, like the EU's MiCA regime and the US BUSD crackdown, illustrates past regulatory actions and market adaptations.