Stablecoin Restrictions Could Hurt UK Financial Leadership

Key Highlights BoE plans to limit stablecoin ownership for individuals and ￰0￱ warn rules could slow UK digital finance ￰1￱ industry criticizes restrictions as impractical and ￰2￱ of England Proposes Stablecoin Limits and Faces Criticism The Bank of England (BoE) has announced plans to impose strict limits on stablecoin ownership prompting backlash from the crypto ￰3￱ limits range from £10,000 to £20,000 for individuals and up to £10 million for businesses according to the Financial ￰4￱ BoE explained that the measures aim to reduce risks to the banking system in the event of “massive and rapid outflows of deposits.” Information about proposed limits first appeared in April 2023

and the BoE presented the corresponding framework later that ￰5￱ Experts Warn UK Could Fall Behind Sasha Mills the BoE's executive director for financial market infrastructure stated: “The limits will help mitigate risks to financial stability that arise from sudden drops in business and household lending and from rapidly scaling systemic payment systems.” However industry representatives argue the limits could disadvantage the UK compared to the US and ￰6￱ Duff Gordon

vice president of international policy at Coinbase said: “Restrictions on stablecoins are bad for UK investors bad for the City and bad for the ￰7￱ other leading jurisdiction has imposed such restrictions.” Simon Jennings

CEO of the UK Cryptoasset Business Council added: “Limits simply don't work in ￰8￱ issuers can't see who owns their tokens so introducing limits would require costly systems such as digital IDs or constant wallet coordination.” Policy experts and academics also warn that London risks losing its competitive edge in digital ￰9￱ Schemla Professor at Imperial Business School

emphasized: “Stablecoins are no longer experimental technologies - they are becoming the foundation of the global digital ￰10￱ has the talent markets and history to lead this space but regulatory delays are eroding that advantage.” Market Impact and Future Outlook According to the Financial Times

the stablecoin market has grown to $288 billion primarily US dollar-pegged ￰11￱ predicts the market could reach $1.2 trillion by 2028 while settlements in stablecoins totaled $717.1 billion as of June ￰12￱ BoE indicated the restrictions may be transitional as the financial system adapts to digital money with a consultation paper detailing the rules expected later this ￰13￱ UK investors

businesses and crypto enthusiasts the upcoming regulations could reshape the local digital finance landscape.