The Bank of England’s latest proposed regime for stablecoins might just be a game-changer for entrepreneurs and innovators in the UK. As someone who has built startups across multiple industries and geographies, I, Violetta Bonenkamp, see this as a pivotal moment for the fintech sector. Stablecoins, originally met with skepticism, are now being embraced not only as future payment tools but as catalysts for innovation and systemic reform. This article explores the details of the Bank of England’s proposal through the lens of real opportunities and challenges for startups, freelancers, and entrepreneurs.
Rethinking Money: Stablecoins and the Bank of England's Vision
Stablecoins, which combine the flexibility of cryptocurrencies with the stability of fiat currencies, have soared in popularity globally. However, their adoption often triggers questions around financial stability, scalability, and innovation. The Bank of England’s proposal to regulate sterling-denominated systemic stablecoins sets the stage for clarity and significant opportunities.
Key points include:
- Systemic Stablecoins Focus: The Bank aims to regulate large-scale issuers of stablecoins defined as systemic under HM Treasury's designation.
- Dual Regulation: Stablecoin issuers will face oversight from both the Bank of England and the Financial Conduct Authority (FCA).
- Liquidity Safeguards: A notable 40/60 split is proposed, with 40% of backing assets kept as unremunerated deposits at the Bank of England and 60% in short-term UK government debt.
- Caps on Holding: Individual users will have limits of £20,000 per coin holding, with businesses allowed up to £10 million in stablecoin balances under certain conditions.
The proposed framework prioritizes financial stability but also offers systematic support for innovation, such as temporary allowances of up to 95% reserves in government assets for new entrants scaling their operations.
Opportunities for Entrepreneurs
Having worked with startups that operate at the intersection of technology, business, and regulators, I recognize potential opportunities this regime could unlock:
1. Building Infrastructure
The dual regulation model encourages startups to specialize in supporting systemic stablecoin issuers or offering compliance services. Startups with expertise in payment infrastructure, compliance, and digital wallets could thrive in this regulated environment. Entrepreneurs can take cues from companies specializing in support for transitions between legacy finance and fintech.
2. Innovation in Fintech
New rules specifically exclude traditional banks from issuing stablecoins, creating avenues for fintech startups to step into uncharted territory. For founders looking to innovate, stablecoins could be integrated into cross-border transactions and decentralized finance platforms.
3. Enhancing Collaboration
With systemic entities, including exchanges and wallets, potentially facing regulation, collaboration across the fintech ecosystem will be vital. Entrepreneurs can pitch solutions that enhance operational resilience, governance, and reliance on distributed ledgers.
How Entrepreneurs Can Prepare to Leverage This Shift
The Bank’s stablecoin regime, while conservative, does not stifle creativity. Here’s how you can position yourself to benefit from this shift:
Step 1: Understand the Guidelines Thoroughly
Carefully read the Bank of England’s consultation paper. Knowing the thresholds, caps, and requirements for reserves will help map opportunities for innovation while staying compliant.
Step 2: Use AI
Agility is key, and AI tools can help founders analyze market gaps and refine their value propositions. For instance, deploying AI-enhanced Business Model Canvases can help entrepreneurs outline potential applications for stablecoins, like microfinance opportunities or streamlining B2B payments.
Step 3: Opt for Modular Solutions
Instead of building massive products, focus on solving specific pain points within infrastructure, compliance, or integrations. Partner with systemic issuers or retailers who may struggle with technical scalability under the new regime.
Step 4: Leverage Grants and Accelerators
The UK has a robust system of support available, including regulatory sandboxes and innovation grants. Apply to programs like Innovate UK or participate in sandbox trials to test stablecoin applications. Success within early-stage trials can help your business scale confidently.
Pitfalls to Avoid
For founders stepping into the stablecoin space:
- Ignoring Scale Requirements: If your venture is unable to scale to systemic proportions quickly, regulatory hurdles might outweigh benefits. Innovators must plan for significant growth or adjust their ambitions.
- Capping Innovation in Small Niches: Refraining from exploring overlaps of stablecoin use outside payments, such as self-custodied tokens with embedded compliance features.
- Overestimating Market Demand Post-Regulation: Although the model fosters trust, market adoption may still progress slower than anticipated. Don’t assume regulation equals instant market readiness.
Statistics that Highlight the Scope of Stablecoins
- In 2025, globally USD-denominated stablecoins constituted 99% of the market, achieving a total value of $225 billion. Entrepreneurs can take cues from this success to design sterling-based alternatives focused on the UK market.
- Up to 60% compliance costs reduction could be achieved via automation technology tailored to the Bank's compliance framework.
Real Insight: What No One Tells You About the UK's Stablecoin Revolution
The biggest challenge hidden beneath the surface of the Bank of England’s proposal is adaptability. As fintech companies begin to focus on stablecoins, compliance systems will need to adjust seamlessly. From my experience, founders often overlook collaboration with traditional players in finance while overestimating their ability to navigate rules. Remember, even compliance-focused startups benefit from thinking like game designers: Get your audience to engage effortlessly, from regulators to the end-user.
Conclusion: A Slow, But Rewarding Roadmap to Innovation
To entrepreneurs across the UK, the Bank of England’s stablecoin framework may appear daunting at first glance. However, the written regulatory architecture is an immense opportunity to position yourself within a future-proof ecosystem. Whether you’re building infrastructure, improving payment rails, or driving innovation in issuance processes, stablecoins are not just currency substitutes but entirely new tools for shaping modern commerce.
Don’t forget to participate in the Bank’s official consultation process. Your voice matters, and your ideas might hold potential solutions that regulators haven't yet imagined.
By examining stablecoin issuance through multidisciplinary lenses like neuroscience and pragmatics (areas I’ve worked in), entrepreneurs can innovate systems that resonate deeply with end-users' cognitive realities. It’s time to think big, act smart, and build solutions that not only comply but inspire.
FAQ
1. What are stablecoins, and why are they significant?
Stablecoins are digital currencies designed to maintain a stable value by being pegged to a reserve asset like a fiat currency. They are seen as transformative for payments and financial systems due to their scalability and integration with blockchain technology. Read more about stablecoins
2. What are the key components of the Bank of England's stablecoin proposal?
The Bank of England’s proposal includes dual regulation by the Bank and FCA, liquidity safeguards such as a 40/60 asset backing split, caps on holdings, and a special "step-up" regime for new entrants to ease scaling requirements. Explore the Bank of England's stablecoin proposal
3. How does the Bank of England define a 'systemic stablecoin'?
‘Systemic stablecoins’ are those that are large-scale issuers and are recognized as significant to the financial system by HM Treasury. They are subject to stricter regulations and supervision to ensure financial stability. Learn about systemic designations
4. Are traditional banks allowed to issue stablecoins?
No, under the proposed regulations, traditional banks are excluded from issuing stablecoins, opening opportunities for fintech startups to innovate in this space. Read further analysis
5. What backing requirements are proposed for stablecoin reserves?
The Bank proposes a 40/60 split, with 40% of reserves as unremunerated deposits at the Bank of England and 60% in short-term UK government debt. New entrants may temporarily hold 95% in government securities to ease scaling. Learn about the liquidity requirements
6. Are there limits on how much stablecoin individuals and businesses can hold?
Yes, individuals can hold up to £20,000 per coin, and businesses can hold up to £10 million under specific conditions. These caps aim to manage risks to financial stability during the initial adoption phase. Discover why limits are imposed
7. How can startups leverage the proposed regulation to innovate in the stablecoin space?
Startups can seize opportunities in payment infrastructure, compliance, and integration services. Participating in innovation-focused programs like the UK’s regulatory sandboxes can also provide advantages. Check out fintech opportunities
8. What happens if a systemic stablecoin issuer is not based in the UK?
Non-UK systemic stablecoin issuers must establish a subsidiary within the UK for regulatory compliance, ensuring that risks to UK financial stability are mitigated through direct oversight.
9. How might this regime impact traditional financing institutions in the UK?
The Bank of England acknowledges the potential for stablecoins to shift deposits away from traditional banks, which could impact credit availability. These regulations intend to ensure a stable transition without disrupting existing financial systems. Explore the systemic implications
10. How can stakeholders provide feedback on the Bank of England’s stablecoin proposals?
Stakeholders can participate in the Bank of England’s public consultation, which remains open until 10 February 2026. Input from industry leaders could shape the final framework. Submit your feedback
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.
