The Bank of England spent months writing strict stablecoin rules. Then the crypto trade hit back hard.
Now the bank is rewriting them.
On Tuesday, BoE Deputy Governor Sarah Breeden spoke at the CityWeek 2026 conference. She said the first plan was too tight.
The bank had wanted to cap each person at £20,000 per stablecoin. Firms got a higher limit of £10 million.
Crypto firms called the idea unworkable. Breeden now agrees.
She said the rule is "cumbersome" for what is meant to be a short-term fix.
The new idea is simple. Cap how many stablecoins each issuer can put out.
That is very different from capping how many one person can hold. Breeden said the new method could keep banks safe at a lower cost to crypto firms.
The point is to stop a slow drain of cash out of the banking system.
A stablecoin is a digital coin pegged to a real currency. The crypto market uses them to move cash fast across exchanges.
The worry is simple. If too many people swap their bank deposits for stablecoins, banks lose the cash they use to fund loans.
That makes the whole system weaker.
The shift would build on an easing that began last year. In its November 2025 paper, the BoE relaxed an older plan.
That older plan would have made firms park all coin reserves at the BoE for no return.
Now big issuers can hold up to 60% of their cash in short-term U.K. government debt. They can earn a return on that share too.
Each round of rules has been a step less strict than the one before.
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The U.S. has moved fast on crypto rules in the past year. London firms warned they would lose business to New York if the BoE held its rules tight.
Breeden said the bank wants its final rules out by year-end. That is "in line with the U.S. timeline," she added.
The U.K. is now in race mode, not caution mode.
Stablecoin use in the U.K. is also growing fast. Banks know that if local rules box in the market, big firms will set up shop elsewhere.
Singapore, Hong Kong, and the UAE have all been pitching themselves as crypto-friendly hubs.
Draft rules drop next month. That version will show how much room sterling stablecoin firms really get.
The final rules are due by year-end. That timing is no accident.
Until then, the U.K. is saying it would rather host stablecoins than chase them away.
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