The Bank of England has published its policy statement and draft Code of Practice for sterling-denominated systemic stablecoin issuers, setting out how it intends to regulate digital money used at scale in UK payments.

The Bank said systemic stablecoins, meaning those widely used in payments and potentially relevant to financial stability, will be regulated jointly by the Bank and the Financial Conduct Authority once recognised by HM Treasury.

The publication follows consultation feedback from 2025 and includes draft rules covering backing assets, issuance, redemption, safeguards and operational standards. The Bank said it intends to finalise the Code of Practice by the end of 2026.

A key change is the Bank’s move toward a temporary issuance guardrail rather than individual holding limits, according to the policy statement and FT reporting. The Bank says the approach is intended to support innovation while protecting credit supply and financial stability during transition.

The framework also points to a future central bank liquidity facility for eligible systemic stablecoin issuers, designed as a backstop in exceptional circumstances rather than ordinary funding support.

This is not a final regime. The consultation closes on 22 September 2026, and further supporting materials are expected in 2027.