The UK is preparing to regulate stablecoins as traditional money

Key points:

• The Bank of England intends to create a comprehensive regulatory framework for stablecoins by the end of 2026, equating them with traditional money.
• The authorities plan to establish strict requirements for reserves, user protection, and risk management.
• This move will strengthen the UK’s position as one of the world leaders in digital finance and crypto asset regulation.

The Bank of England (BoE) has announced plans to introduce a comprehensive regulatory framework for stablecoins by the end of 2026, Bloomberg reports. The initiative should strengthen the UK’s position as one of the leaders in digital finance.

Bank of England Governor Andrew Bailey said that stablecoins actively used for payments should be regulated in the same way as traditional money, emphasizing the need for reliable guarantees. Regulatory frameworks will introduce requirements similar to those imposed on banks, including depositor protection, strict reserve management, and the possibility of providing stablecoin issuers with access to central bank reserves.

Consultations and transitional measures

Public consultations will begin on November 10, 2025, to obtain feedback from financial institutions, fintech companies, and digital asset issuers. The result will be a unified regulatory framework covering the quality of reserve assets, repayment guarantees, and storage standards. The Financial Conduct Authority (FCA) will also consult on issuance and custody issues. Both agencies are expected to finalize the joint regulatory framework by the end of 2026.

During the transition period, the regulator is considering temporary restrictions: the amount of individual assets in stablecoins may be limited to between 10 000 and 20 000 sterling pounds. These restrictions will act as a precautionary measure during the initial implementation phase, allowing regulators to monitor systemic risk and market dynamics before expanding usage. Although these restrictions have been criticized by industry groups, the Bank of England argues that they are temporary and necessary for financial stability.

The banking and fintech sectors are already adapting to the new rules. Major players have begun experimenting with tokenized deposits — digital equivalents of fiat currencies — to bridge the gap between traditional banking and blockchain-based finance. Industry experts believe these innovations will complement stablecoins once the new rules come into effect.