The Bank of England has taken a significant step in establishing a regulatory framework for stablecoins by releasing a policy statement and a draft code of conduct for systemically important stablecoin issuers on June 22nd.

The framework introduces two key policy adjustments. First, the maximum proportion of interest-bearing assets, specifically short-term UK government bonds, permitted within a stablecoin's reserve assets has been increased from 60% to 70%. The remaining reserves must be held as deposits at the central bank.

Second, the framework replaces a previously proposed temporary holding limit with an issuance cap. The initial issuance cap for each systemically important stablecoin is set at £40 billion. This cap will be subject to periodic review and will be removed once risks to credit supply have been mitigated.

The consultation period for this regulatory framework will close on September 22, 2026. The Bank of England aims to finalize the code of conduct by the end of 2026, paving the way for regulated stablecoins to begin compliant operations in the UK as early as 2027.