Bank of England Sets Temporary Stablecoin Limits, Governor Clarifies

Highlights:

• Bank of England defends earlier proposed stablecoin limits as a step to protect stability.
• Governor Breeden says sudden outflows into stablecoins could disrupt household and business lending.
• Central bank seeks industry input before finalizing rules on systemic stablecoin holdings.

At DC Fintech Week on Wednesday, Bank of England Governor Sarah Breeden explained that the central bank’s proposed stablecoin limits are only temporary. She said the measures are designed to protect financial stability while the system adjusts to digital currencies.

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According to Bloomberg, Bank of England Deputy Governor Sarah Breeden said the central bank is considering temporary limits on holdings and transactions for systemic stablecoins to prevent potential disruptions to bank deposits and real-economy financing. The proposed…

— Wu Blockchain (@WuBlockchain) October 15, 2025

BoE Stablecoin Limits Target Financial Stability

The Bank of England’s proposal sets strict limits on the amount of stablecoin that individuals and businesses can hold at any given time. A final decision has not been made yet, but earlier drafts suggested limits of £10,000 to £20,000 for individuals and up to £10 million for companies. Large firms might be exempt from these limits to meet business or settlement needs. “Our starting point is that applying limits to a user’s holdings of a given systemic stablecoin is the best way to avoid such a precipitous reduction in the availability of credit to UK borrowers,” she added.

Breeden said the Bank of England’s main concern is that large amounts of money could move from banks into stablecoins. If this happens too quickly, it could sharply reduce loans for households and businesses. The system might not be able to handle such sudden outflows fast enough. She stressed that the priority is to let the financial system adjust slowly, especially in the UK. Unlike some other countries, lending in the UK depends heavily on banks, so sudden shifts could have a big impact.

We've invented global, borderless money that lets Finance scale at the speed of technology.

But the Bank of England wants to send all the benefits of this to zero by capping the amount of stablecoins an individual can hold at 20k. pic.twitter.com/5XcDaOkwZ6

— Happy (@happysubstack) September 15, 2025

Breeden said the rules will be removed once the bank is confident that stablecoins no longer threaten loans to households and businesses. She reaffirmed that the Bank of England aims to support stablecoins as part of the UK’s payment infrastructure. “So let me be clear. We would expect to remove the limits once we see that the transition no longer threatens the provision of finance to the real economy,” she added. 

BoE Seeks Industry Collaboration and Public Feedback on Stablecoin Rules

Breeden said that the central bank should handle large payments and money transfers in financial markets to keep the system stable and secure. She explained that not all payments use central bank money today, and this is expected to remain the same in the future. Other digital forms of money, such as tokenized deposits and regulated stablecoins, will also be part of the system. “We can’t, though, do this alone. We need the industry — both incumbents and new entrants — to work with us to engage, to experiment, to develop the use cases, and to deploy this technology,” Breeden added.

She said the Bank of England plans to launch a consultation before the end of 2025. The goal is to gather feedback on the proposed holding limits, possible exemptions for large businesses, and how to apply the rules in practice. Breeden added that the Bank also wants opinions on different ways to meet its goals while setting these limits.

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