The Bank of England announced on Monday that issuers of systemic stablecoins will be allowed to invest up to 60% of their backing assets in short-term government debt.
Under the proposed framework, at least 40% of the assets backing stablecoins must be held directly at the Bank of England, while the remainder can be invested in short-term UK government debt securities.
The central bank also outlined storage limits for stablecoin users, proposing caps of £20,000 for individuals and £10 million for businesses.
For stablecoins transitioning from the existing Financial Conduct Authority (FCA) regime, the Bank of England proposed a more flexible approach, allowing these issuers to hold up to 95% of their backing assets in short-term government debt.