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In its latest consultation update, the BoE dropped its proposed £20,000 cap on individual stablecoin holdings, a limit widely criticized as a barrier to mainstream adoption. Then came a separate rule requiring stablecoin issuers to deposit 30% of their reserve assets in a non-interest-bearing central bank account remains firmly in place.
In a reaction to the ruling published on X, Aave founder Stani Kulechov warns that this provision effectively functions as a tax on issuers. Those funds cannot generate returns to support operational costs. The Bank also retained a £43 billion issuance cap on sterling stablecoins, which could determine whether sterling stablecoins scale at home or grow elsewhere before the framework is even tested.
The Bank of England has made some welcome improvements to its stablecoin framework, but the overall policy still appears designed to ensure that UK-based stablecoin issuers cannot succeed. Here's why:
Scrapping the proposed £20,000 cap on individual stablecoin holdings was an…
— Stani (@StaniKulechov) June 22, 2026
According to the UK’s own parliamentary record, it is clear that industry voices have been raising this concern for months.
Circle’s Chief Strategy Officer Dante Disparte told the House of Lords stablecoin inquiry in March 2026 that the UK now faces a choice between creating a clear and credible framework that attracts responsible actors or allows activity to remain offshore, potentially importing risk without oversight or economic benefit.
Stablecoin issuers mainly earn revenue by investing reserves in short-term government securities and money market instruments. For example, a £1 billion stablecoin would need to park £300 million at the BoE with zero yield.
At current UK short-term gilt rates near 4.5%, that means roughly £13.5 million in foregone annual revenue. For a mid-sized issuer such a gap between compliance cost and revenue viability may simply close the business case for operating in the UK altogether.
Kulechov noted that this burden could make the UK unattractive for stablecoin companies. Firms may instead choose jurisdictions with more flexible rules, such as the EU under MiCA or parts of Asia.
The UK does not operate in isolation. The EU’s MiCA framework is already active on the continent.
MiCA legislation is basically Europe’s version of CARF.
That is the way Europe has complied with the CARF agreement through the MiCA regulations. The CARF framework basically obliges exchanges in countries that have signed onto CARF to give information to other countries that…
— Clinton Donnelly (@CryptoTaxFixer) June 22, 2026
Japan recently approved SBI’s yen stablecoin JPYSC, with the token waiting for launch. In the US, the GENIUS Act allows reserve backing without mandating non-yielding central bank deposits. With these alternatives waiting in the wings, it could be an opportunity for issuers to forge clearer paths towards generating returns while meeting regulatory standards.
The BoE’s feedback period on the latest consultation closes on September 22, 2026. The full stablecoin framework is expected to be finalized by the end of 2026, with implementation targeted for October 2027. This gives the industry roughly three months to argue for changes, or removal, of the 30% non-yielding reserve requirement before the rules are set.
Deputy Governor Sarah Breeden signaled in May that policymakers are reviewing alternative approaches to managing digital money risks following industry pushback. Whether this extends to easing the reserve rule remains to be seen.
What’s clear is that every month that passes with the 30% provision intact is a month competitors in other jurisdictions are building the distribution infrastructure the UK wants to attract.
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