In 1694, a radical proposal hit the desks of the English Parliament: a National Land Bank that would issue paper notes backed, not by gold but by English soil. The idea was simple yet explosive, turn illiquid land into liquid credit, expanding the money supply and mobilising dormant assets for the nation’s good. It failed. The Bank of England (BOE), founded the same year on bullion, succeeded. Fast-forward 332 years and look at this comparison:
Stablecoins v National Land bank
The parallel is uncanny, only this time the experiment is not failing - it is scaling inside corporate balance sheets right now. Under English law, companies do not need legal tender to settle obligations; freedom of contract is absolute outside the narrow courtroom rules of legal tender. The Bank of England itself admits legal tender “has a very narrow technical meaning” and does not compel businesses to accept cash or bank transfers in everyday commerce. That single sentence quietly upends everything the BOE is trying to build with its new systemic stablecoin regime.
Legal tender vs corporate reality
Legal tender rules apply only when a creditor sues for payment and the debtor tenders’ coins or notes in court. In the real world of B2B contracts, parties agree on whatever consideration they like. A supplier can accept tokenised gilts, stablecoins, fractional real-estate tokens or even carbon credits if the contract says so. The doctrine of accord and satisfaction (still good law since Foakes v Beer 1884) confirms it: if both sides agree that transferring an asset discharges the debt, the debt is gone. Corporate treasurers already exploit this daily; multinationals settle cross-border invoices in USDC. For example, Hanson (Lord Hanson) exchanged its 49% stake in Newmont Mining (major US gold mines) for Goldsmith’s Cavenham Forest Industries - 1.7 million acres of prime US timberland. A swap at the time valued at around $1 billion. Moreover, oil companies swap entire portfolios of oil/gas fields, pipelines and licences worth hundreds of millions to billions to rebalance holdings without cash. A high-profile example is Shell exercising rights to acquire BP’s stake in the Shearwater gas field. Private-equity houses routinely do debt-for-equity swaps worth hundreds of millions, as was the case when Netceed (2025 telecom supplier)and the lenders (Pemberton, Blue Owl, Hayfin) took control via one of the largest recent swaps. None of these transactions touch sterling bank deposits; the BOE monetary policy transmission, the very mechanism it spent decades perfecting, simply does not apply.
The corporate tokenisation surge
The real shift is not retail stablecoins (the ones the BOE is obsessing over with £20,000 individual holding limits). It is corporate settlement. Imagine a FTSE 100 supplier invoicing a retailer £5 million - instead of waiting 60 days for a bank transfer, the retailer transfers ownership of a tokenised warehouse on a permissioned ledger in 11 seconds (title, VAT invoice and payment, all in one atomic transaction). The supplier immediately pledges that tokenised warehouse as collateral for a repo with another counterparty. Liquidity moves without ever touching a commercial bank balance sheet, and this is already happening inside the Digital Securities Sandbox and on private chains used by major custodians. The UK Jurisdiction Taskforce confirmed cryptoassets are property capable of forming the subject matter of trusts and security interests. When companies, not individuals, settle in non-sterling assets at scale, the BOE’s entire systemic stablecoin framework starts to look like a solution in search of a problem that has already been solved by contract.
What the BOE’s stablecoin regime actually regulates
The BOE’s CP 2025 regime retail payments are clearly the primary policy driver and use-case focus. Having regulations so that sterling stablecoins will need to hold 40 % in unremunerated BOE deposits, <60 % short gilts, imposing a £20,000 individual limit and £10million business holding limits, makes it commercially unattractive for companies to create and issue a GBP stablecoin. So, how does this encourage innovation in payments? Furthermore, insisting a sterling stablecoin is not allowed to pay interest i.e. ‘treat holders fairly’ on their cash deposits. Then there are mobilisation limits (as defined by the BOE): “New banks, once authorised, operate with deposit restrictions while they complete the final aspects of their set up before starting to trade fully.” For “systemic-at-launch” issuers, all are undermining the business case of a sterling stablecoin.
But corporate treasurers don’t care about the £20,000 cap. They operate at £20 million per transaction. They don’t need “systemic stablecoins” issued under BOE oversight, because they can simply contract to accept USDC, EURC or tokenised UK gilts issued under different legal wrappers. Freedom of contract renders the BOE’s narrow-banking straitjacket optional for anyone sophisticated enough to draft a decent purchase-order clause. The result? The very disintermediation the BOE fears from retail stablecoins is already occurring - faster and larger - through corporate asset settlement. Banks lose deposit funding, not because Grandma is holding £5,000 of stablecoin, but because Unilever and Tesco have agreed to settle their £300million annual supply chain in tokenised commercial paper. Walmart, Amazon and Expedia are all rumoured to be looking at launching their own stablecoin and, if so, will be following in the footsteps of Sony which already has launched one.
Historical echoes and modern risks
The 1694 Land Bank failed because Parliament feared it would undermine the new Bank of England’s monopoly on note issuance. Today, the BOE operates similarly, except the “notes” are smart contracts backed by corporate balance sheets instead of landed gentry. If companies can legally mobilise any asset into settlement rails (tokenised real estate, carbon allowances, fractional art, even future revenue streams via revenue-based tokens), then sterling bank money loses its privileged position; monetary policy transmission weakens. The BOE’s lender-of-last-resort role shrinks because the liquidity that matters is now on-chain and programmable, not sitting in reserve accounts. Worse, the BOE has no direct supervisory hook. The stablecoin regime only bites issuers who choose to label their product “sterling systemic stablecoin”. A corporate treasury department using privately issued tokenised gilts or foreign stablecoins under a simple master services agreement? Perfectly legal, perfectly outside the regime.
The thought-provoking questions the BOE to look at answering:
- If freedom of contract allows companies to settle £ trillions annually without sterling deposits, what exactly is the BOE protecting with its 40/60 backing split and unremunerated deposit requirement?
- When corporate adoption of tokenised settlement overtakes retail stablecoin volumes (a likely outcome within 36 months), will the BOE be forced to admit that its holding limits and mobilisation caps were always a retail-only sideshow?
- How does the Bank intend to maintain monetary sovereignty when the “money” that matters to the real economy is whatever two sophisticated counterparties agree it is?
The Law Commission and HM Treasury have already opened the door to programmable settlement via the Digital Securities Sandbox. The BOE’s own consultation papers talk about “interoperability” whilst simultaneously building a regime that only regulates one narrow slice of the market. The uncomfortable truth: English contract law has always been more permissive than the BOE’s current regulatory ambition. Companies are simply exercising a 300-year-old freedom the Bank is belatedly trying to corral. From an ECB and EU perspective, the rise of tokenised and contractual settlement is not seen as a threat to monetary sovereignty per se, but as an innovation that must remain anchored to central bank money to preserve the singleness of the currency and financial stability. Whilst wholesale tokenisation is expected to grow rapidly, authorities aim to bring it within the regulated perimeter rather than treat it as outside the system. Private agreements between counterparties do not redefine money at a systemic level, as central bank money remains the ultimate settlement anchor. In this context, initiatives such as qivalis are viewed positively insofar as they enable interoperability and compliant integration with existing and future central bank infrastructures, reinforcing rather than fragmenting the monetary system.
Identified opportunities
Regulated stablecoins under GENIUS create compliant “rails” for banks (e.g., tokenised deposits, repo markets such as Broadbridge’s $8Trillion a month of turnover), boosting efficiency in treasury ops and settlements as you describe. MiCA-GENIUS alignment will enable global institutions to issue hybrid dollar/euro plumbing, enhancing dollar dominance via programmable, smart contract based, ledgers whilst attracting capital - e.g., European banks launching MiCA-compliant tokens for interoperable flows. Overall, restrictions foster trust, drawing institutions to build the “invisible” backend infrastructure the article champions. Stablecoins are one of the operational layers that can bring efficiency into the payment rails. It will be infrastructure that has many customer facing applications on top of it. (digital euro will be retail, wholesale CDBC will be the interbanking solution)
The path forward
The BOE faces a binary choice. It can double down on restricting retail sterling stablecoins whilst corporate settlement quietly bypasses the entire framework - accelerating the very disintermediation it claims to fear. Or it can acknowledge that asset-based settlement is not a threat but the logical evolution of the same principle that created the Bank of England in 1694: mobilising private assets into public liquidity. The smarter move is the latter; extend the systemic regime’s liquidity backstop and interoperability mandates to corporate tokenised rails. Drop the retail-only holding limits that will prove unenforceable anyway. Focus supervision where the real volume and risk sit – on the balance sheets of the companies actually moving the money, because, in the end, English law never required payment in pounds. It only required agreement. And in 2026, the largest agreements in the UK economy are being written not by retail consumers, but by corporate legal departments which have discovered they can settle in whatever asset delivers the cheapest, fastest, most programmable finality. The Land Bank dream of 1694 is alive - it just traded paper notes for blockchain tokens, and this time the debate is no longer political. It is regulatory.
And the Bank of England is running out of time to write the rules.
This article first appeared in Digital Bytes (31th of March, 2026), a weekly newsletter by Jonny Fry of Team Blockchain.