What happened?
Bank of England governor Andrew Bailey said the BoE plans to give widely used stablecoins access to central bank accounts while warning they could change how money and credit work in the UK. The Bank is preparing a consultation on a systemic stablecoin regime and has floated ownership caps of about £10,000–£20,000 for individuals and up to £10 million for businesses. Bailey also said stablecoins must be backed by very safe assets and have insurance and resolution rules similar to bank deposits.
Who does this affect?
This touches commercial banks, which could see deposit outflows if people move cash into stablecoins, and non-bank lenders who might expand lending if the two split money holding from credit. It affects stablecoin issuers and crypto firms facing new rules and potential ownership caps that industry groups say are hard to enforce. Retail users, businesses that want faster settlement for tokenised assets, and regulators and financial market infrastructure providers will also feel the impact as rules and systems change.
Why does this matter?
This could reshape markets by shifting liquidity out of traditional banks, changing how lending is funded and forcing banks to compete harder for deposits, which would affect interest rates and credit availability. The regulatory choices will influence the trajectory of the growing stablecoin market (already hundreds of billions and forecast by some to reach over $1 trillion), either accelerating crypto adoption or slowing it through uncertainty and compliance costs. That, in turn, will affect investment flows, market infrastructure demand, and the role of the City and sterling in global payments and tokenised markets.