U.K. Stablecoin Rules Could Anchor Digital Money to the Bank of England’s Balance Sheet

Systemic stablecoin issuers in the U.K. will be granted direct accounts at the Bank of England, a move that anchors digital money to the central bank’s balance sheet. At least 40% of a systemic stablecoin’s reserves must be held in those accounts. Up to 60% of reserves can be invested in short-term U.K. government debt (gilts). The Bank of England is considering a liquidity facility to backstop the monetization of those gilts. This structure ensures systemic stablecoins are as robust as traditional money. Stablecoin issuers can earn a return on the majority of their backing assets through gilt yields. The regime may impose temporary caps on holdings, supply, or transaction sizes to protect bank credit to the real economy. The design aims to ensure stability while supporting innovation in digital money. Projects like Hedera, Ripple, and Quant are already embedded in Bank of England–linked DLT experiments. Regulated tokenised money on public or hybrid DLTs is becoming an inevitability in the U.K. financial system.