Response on the Stablecoins Code of Practice

Bitcoin Policy UK responded to the Bank of England's consultation on its draft Code of Practice for sterling systemic stablecoins, published in June 2026. The Code sets out how stablecoins large enough to pose a risk to financial stability must be backed, how holders can redeem them for pounds and how issuers must run their businesses. The response supports two changes made since the Bank's November 2025 consultation: cutting the share of backing assets that issuers must hold as a Bank of England deposit from 40% to 30%, and replacing per-coin holding limits with a £40 billion issuance threshold, which avoids the identity checks and privacy concerns that holding limits would have raised.

It warns that the regime's fixed costs are likely to fall hardest on smaller and newer stablecoin issuers and on firms without an established banking relationship. The Bank's own example puts capital and reserve requirements at about £461 million for a £40 billion issuer, not counting the cost of holding 30% of backing assets at the Bank without earning interest, and the response asks for a comparable example for a smaller issuer. It also asks the Bank to review the 30% requirement as evidence from stablecoin use builds up, to explain how privately issued stablecoins will remain distinct from central bank money as they come to depend on Bank of England infrastructure, and to limit the personal data collected and shared during redemption to what is strictly necessary.