The Bank of England stablecoin cap proposal sets new limits on holdings and has drawn sharp pushback. Who proposed it? The Bank of England. What is proposed? Caps of roughly £10,000–£20,000 for individuals and £10 million for businesses. When did this emerge? The debate intensified in 2025 as regulators and industry leaders weighed in. Where does this apply? Primarily the UK, with U.S. officials watching closely. Why now? To reduce perceived financial stability risks and the chance of large outflows — a U.S. Treasury report warned of outflows up to $6.6 trillion for some yield-bearing stablecoins. How would it work? By enforcing caps on holdings to limit systemic exposure. The Bank of England stablecoin cap proposal aims to curb risk but critics say it could stifle innovation and hurt UK savers.
What the proposal says
The Bank of England stablecoin cap would require retail wallets to hold no more than £10,000–£20,000 in stablecoins and place a £10 million ceiling on corporate holdings. Regulators frame the move as a tool to prevent runs and protect the banking system from mass stablecoin outflows. The caps on holdings are designed to limit concentrated risks, but they raise questions over proportionality and effectiveness.
Industry reaction
Coinbase called the Bank of England stablecoin cap proposal restrictive and warned it could hamper growth in the UK. Coinbase executives and other crypto firms argue caps could push users and innovation offshore. Read more about Coinbase’s wider strategy in the market in this post: Base token launch: Coinbase explores community-led governance. U.S. banking officials echoed concerns about stability, citing the US Treasury report that models outflows up to $6.6 trillion.
Risks and trade-offs
Proponents say the Bank of England stablecoin cap protects UK savers and the financial system. Opponents say heavy-handed limits will weaken UK competitiveness and slow DeFi and payments innovation. Some experts propose integrating stablecoins into regulated banking rails instead of strict caps. Discussion of compliant stablecoin frameworks is active across jurisdictions — see developments on US-focused stablecoin projects: USAT stablecoin promises U.S. compliance and market access via Anchorage Digital.
Next steps
The Bank of England is expected to consult further and refine rules. Market participants, from Coinbase to banks, will lobby and offer alternatives. The final approach could combine limits, improved transparency, and tighter reserve rules rather than flat caps.
Frequently asked questions about Bank of England stablecoin cap (faq)
Who would be affected by the Bank of England stablecoin cap?
Retail holders, businesses in the UK, crypto firms operating in the UK, and international users who use UK services.
What are the proposed limits?
Roughly £10,000–£20,000 for individuals and up to £10 million for businesses.
Why is the cap proposed?
To reduce financial stability risks tied to rapid stablecoin outflows and protect credit markets.
Could the caps drive innovation away?
Yes. Industry groups warn caps could reduce UK competitiveness and push projects offshore.
Sources to this article
Bank of England (2025) Consultation on stablecoin holdings and financial stability, Bank of England.
U.S. Department of the Treasury (2024) Report on stablecoins and potential outflows, US Treasury.
Coinbase (2025) Public statements on UK regulation and token governance, Coinbase.
