UK Stablecoin Rules: The Payments Association Says the Framework Is Not Competitive

The Bank of England's proposed stablecoin framework has a structural problem — and the UK payments industry is saying so publicly.

The Payments Association published its formal response to the BoE consultation this week, identifying two provisions that could undermine the UK's ability to attract stablecoin issuers. First, the requirement to hold 40% of backing assets in unremunerated central bank deposits creates a significant drag on business model viability. The industry is calling for an 80:20 split between government debt and central bank deposits instead. Second, holding limits of £20,000 for individuals and £10 million for businesses could discourage institutional adoption and signal a restrictive posture to international markets.

The report also identifies five primary use cases where stablecoins are already being deployed to address real inefficiencies: cross-border settlement, merchant payment costs, trade finance, digital asset tokenization, and agentic commerce — where AI agents require high-frequency, low-value settlement rails.

The conclusion is direct: without a more flexible framework aligned with the EU, Singapore, and the US, the UK risks losing the investment required to lead in next-generation digital financial services.

For operators choosing a jurisdiction for stablecoin issuance, the regulatory economics matter as much as the legal framework.

**Source:** Disruption Banking, April 22, 2026 — https://www.disruptionbanking.com/2026/04/23/the-payments-association-calls-for-revised-stablecoin-regulation/