Bank of England scraps stablecoin holding caps, sets £40B issuance limit

Stablecoin Regulation Takes Shape as U.S. Agencies and Bank of England Advance New Frameworks

A year after the U.S. Senate passed the GENIUS Act in a landmark 68-30 bipartisan vote, the legislation’s implementation is entering a decisive phase as federal agencies race to finalize rules before a July 18, 2026 statutory deadline, while across the Atlantic, the Bank of England unveiled a revised approach to regulating systemic stablecoins.

U.S. Agencies Push Toward July Deadline

Six federal agencies are in a final sprint to publish rules implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act, which became law on July 18, 2025, establishing the first federal regulatory framework for dollar-pegged payment stablecoins. The OCC, FDIC, NCUA, Treasury, FinCEN, and OFAC must each finalize their frameworks before the one-year statutory deadline.jonesday

As part of that effort, the Federal Reserve Board proposed a joint rule requiring permitted payment stablecoin issuers to maintain written customer identification programs comparable to those already required of banks and credit unions. Under the proposal, issuers would need to collect a customer’s name, date of birth, address, and identification number before opening an account, and retain records for five years after an account is closed. Comments are due 60 days after publication in the Federal Register.biometricupdate

The law classifies compliant stablecoins as neither securities nor commodities, bars them from paying yield or interest to holders, and requires reserves backing each coin on a one-to-one basis.angelinvestorsnetwork

Bank of England Scraps Individual Holding Caps

On Monday, the Bank of England abandoned its earlier proposal to limit how much stablecoin individuals and businesses can hold, replacing it with a provisional £40 billion cap on total issuance per systemic coin. The central bank had previously floated limits near £20,000 for individuals and £10 million for businesses.bloomberg

Issuers will now be permitted to hold up to 70 percent of backing assets in short-term UK government debt, up from an earlier proposed 60 percent. Final rules are expected by the end of 2026, with regulated stablecoins potentially launching in 2027.yellow

What Comes Next

In the United States, once final rules are published, issuers will have approximately 120 days to comply before the framework takes effect in late 2026. The legislation permits state-level regulation for issuers with less than $10 billion in total stablecoin issuance, provided state regimes are deemed “substantially similar” to federal standards by the Treasury Department. For the broader crypto industry, the GENIUS Act’s passage through the Senate last year with 18 Democratic votes joining Republicans marked a turning point — the first major digital assets legislation to clear either chamber of Congress.bloomberg