Fireblocks Highlights Concerns Over BoE Stablecoin Rules and Profitability Impact for UK Issuers

Fireblocks has shared an update.

The company highlighted an op-ed by Varun Paul, its Senior Director for Financial Markets and a former Bank of England policy expert, analyzing the Bank of England’s stablecoin consultation. Paul argues that the proposed 40% unremunerated reserve requirement for stablecoin issuers in the UK could create a significant profitability gap versus other major jurisdictions. At an issuance scale of £10 billion, he estimates UK issuers would forgo £150–200 million in annual income compared with U.S. frameworks, where issuers can earn returns on their entire reserve base. The article outlines three key challenges in the proposed framework and advocates for paying interest on stablecoin reserves held at the central bank. The consultation period is open until February 10, 2026.

For investors, this update underlines Fireblocks’ active engagement in regulatory discussions that are likely to shape the economics of stablecoin issuance and, by extension, demand for institutional-grade digital asset infrastructure. If the Bank of England maintains a strict, unremunerated reserve regime, UK-based stablecoin issuers could face structurally lower margins, potentially dampening issuance volumes and slowing market growth in the UK relative to the U.S. and other regions. That environment might limit the near-term scale of Fireblocks’ UK stablecoin-related business but could also increase demand for efficient, compliant infrastructure as issuers seek to optimize costs within tighter regulatory constraints.

Conversely, if policymakers adopt remuneration of reserves or otherwise revise the framework to narrow the profitability gap, the UK could become more competitive as a stablecoin hub, supporting higher transaction volumes and institutional participation. This would likely be beneficial for infrastructure providers like Fireblocks that service banks, fintechs, and other institutions entering tokenized money and stablecoin markets. Fireblocks’ public policy engagement may also enhance its credibility with regulators and large financial institutions, supporting its positioning in the evolving digital asset and tokenization ecosystem over the medium term.