From Treasury Masterminds
Stablecoins have been one of the most debated innovations in financial markets over the past few years. For many corporate treasurers, the topic sits somewhere between curiosity and suspicion. The technology promises faster settlement, programmable payments, and potentially cheaper cross-border transactions. At the same time, it carries the baggage of crypto volatility, regulatory uncertainty, and reputational risk.
Recent comments from the Bank of England (BoE) suggest the regulatory landscape around stablecoins may still be very much in flux.
The Bank of England Reconsiders Its Approach
According to a recent report by Reuters, the Bank of England has signalled that it is open to revising its proposed rules for sterling-denominated stablecoins. The central bank launched a consultation in late 2025 outlining how “systemic” stablecoins, those potentially used at scale for everyday payments, should be regulated.
One of the more controversial proposals was a requirement that stablecoin issuers hold 40% of their backing assets as non-interest-bearing deposits at the central bank, with the remaining backing held in safe assets such as short-term government debt.
The consultation also proposed holding limits, including roughly £20,000 for individuals and £10 million for businesses. These limits were designed to reduce the risk that large volumes of bank deposits could rapidly migrate into stablecoins during periods of stress.
The industry response has been predictable: criticism.
But the interesting twist is that regulators say criticism alone is not particularly useful.
Deputy Governor Sarah Breeden told lawmakers that the central bank was “genuinely open” to alternative approaches but had received little constructive feedback on how to achieve the same financial-stability objectives.
In other words, regulators are willing to talk, but they want solutions, not just complaints.
Why Regulators Care So Much
The concern from central banks is not really about crypto enthusiasm. It is about financial stability.
If stablecoins became widely used for payments, a large shift from bank deposits into stablecoins could reduce banks’ funding base. That might sound abstract, but the implications are quite concrete. Bank deposits fund lending. If those deposits move elsewhere quickly, credit creation and financial stability can be affected.
This is why the Bank of England wants stablecoins that function as money in the economy to be “as robust as the money we use today issued by banks.”
That explains the heavy reserve requirements and holding caps. They are essentially guardrails designed to avoid a digital bank run scenario.
The Reality: Stablecoins Are Still Niche
Despite the noise, stablecoins remain a relatively small part of the financial system, particularly in sterling.
Most stablecoins today are still US-dollar-denominated and are used primarily within crypto markets rather than mainstream payments.
The Bank of England itself acknowledges that the future role of stablecoins remains uncertain. Questions around scalability, adoption and business models still need to be answered.
Interestingly, the central bank is also considering whether tokenised commercial bank deposits might ultimately be a more practical solution for digital payments than stablecoins.
For treasurers, that distinction matters. Stablecoins and tokenised deposits may deliver similar payment efficiencies, but they sit in very different regulatory frameworks.
What This Means for Corporate Treasury
For corporate treasurers watching the digital money debate, there are three takeaways.
1. Regulation is still being written
The regulatory framework for stablecoins is not fixed. Central banks are experimenting, consulting, and adjusting their views as the market evolves.
2. The real debate is about trust
Stablecoins are essentially private money. Regulators want them to meet the same standards of safety and reliability as traditional bank money.
3. The use cases still need to prove themselves
For treasury teams, the theoretical benefits are obvious:
- Faster cross-border settlement
- Reduced intermediary costs
- Potentially 24/7 programmable payments
But real adoption will depend on infrastructure, regulation, and interoperability with existing banking systems.
The Bigger Picture
The stablecoin debate is not really about crypto. It is about the future architecture of money.
Central banks, commercial banks, fintechs, and crypto firms are all experimenting with different models: CBDCs, tokenised deposits, and stablecoins.
The likely outcome is not one winner.
It is a multi-money ecosystem where several forms of digital money coexist.
For corporate treasurers, the practical question is simple: which of these options actually solves real operational problems.
Until that answer becomes clear, stablecoins will remain exactly where they are today.
Interesting, promising, slightly controversial, and not quite mainstream yet.
Source: Reuters, “Bank of England open to revising stablecoin rules, Breeden says,” March 11, 2026.
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