Bank of England Plan to Cap Stablecoin Holdings Draws Fire From Crypto Sector

The Bank of England’ s proposal to impose strict limits on how much stablecoin individuals and companies can own has reportedly triggered a backlash from the crypto industry, which says the measure risks stifling growth and putting Britain behind its ￰0￱ have suggested ownership caps of between £10,000 and £20,000 ($13,600 to $27,200) for individuals and £10m ($13.6m) for businesses on systemic stablecoins, those widely used for payments or likely to become ￰1￱ plan comes as the central bank, working with the Financial Conduct Authority, develops a regulatory framework for digital tokens pegged to fiat ￰2￱ Defends Plan as Safeguard Against Banking System Risks Industry groups argue the approach is unnecessarily ￰3￱ Duff Gordon, vice-president of international policy at Coinbase, told the Financial Times that imposing caps would be “bad for UK savers, bad for the City and bad for sterling.” He pointed out that no other major jurisdiction has chosen to restrict ownership in this ￰4￱ central bank’s caution reflects concerns that widespread use of stablecoins could drain deposits from traditional banks and weaken the financial ￰5￱ insist the limits could be transitional while the market adjusts to the rise of digital ￰6￱ crypto executives warn the plan would be almost impossible to ￰7￱ Jennings, executive director of the UK Cryptoasset Business Council, said stablecoin issuers cannot monitor who holds their tokens at any given ￰8￱ Bank Stance at Odds With Treasury’s Pro-Innovation Agenda Enforcing caps, he argued, would require complex and costly systems such as digital IDs or constant coordination between ￰9￱ proposal threatens to deepen tensions between the Bank of England and the Treasury, which has signalled support for digital innovation in financial ￰10￱ Rachel Reeves said in July she wanted to drive forward developments in blockchain technology, including tokenized securities and ￰11￱ say the central bank’s approach contrasts sharply with the US, where Congress passed the GENIUS Act this summer, embedding stablecoins more firmly into the financial ￰12￱ European Union has also introduced a comprehensive regime under its MiCA rules without resorting to ownership ￰13￱ Market Nears $288B, Projected to Top $1.2 Trillion The stablecoin market is now a fast-growing part of global ￰14￱ is valued at around $288b.

Most of that value comes from dollar-based ￰15￱ ahead, Coinbase has forecast the sector could expand to US$1.2 trillion by ￰16￱ UK firms, the concern is ￰17￱ fear that limits on ownership will curb ￰18￱ a result, business could shift overseas. Meanwhile, supporters of stablecoins argue the ￰19￱ say the tokens can cut the cost and time of cross-border ￰20￱ also believe stablecoins will drive wider innovation in financial ￰21￱ Bank of England plans to publish a consultation later this ￰22￱ will outline its updated approach to regulating stablecoins. However, industry representatives are already urging the bank to ￰23￱ warn that without more flexible rules, Britain could fall ￰24￱ their view, the global race to regulate and embrace digital assets will leave the UK trailing if the current plan stands.