The Bank of England has published its proposed rules to govern stablecoins.
The rules come in the form of a policy statement and establish a framework for the United Kingdom’s stablecoin regime.
Stablecoins are cryptocurrencies whose value is pegged to another asset, typically the U.S. dollar or another currency such as the British pound.
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The Bank of England’s stablecoin framework enables U.K.-issued stablecoins to develop as trusted forms of digital money.
Advocates say that stablecoins enable faster, cheaper, and more flexible financial services for users, notably in cross-border transactions.
Several countries are in the process of developing guidelines to oversee the use and adoption of stablecoins, including the U.S. and Canada.
The Bank of England and the U.K. Financial Conduct Authority are working together to develop a stablecoin regime.
The rules set a maximum limit on shares held in interest-bearing assets, specifically short-term U.K. government debt, of 70%, with the remainder to be held in central bank deposits.
The Bank of England has also set an issuance limit on each stablecoin of £40 billion.
The British central bank aims to finalize the stablecoin regulations by the end of this year. The guidelines will allow regulated stablecoins to operate in the U.K. starting in 2027.