Bank of England’s Stablecoin Cap Plan Get a Pushback From UK Lawmakers
A cross-party group of from both the House of Commons and the House of Lords is challenging the Bank of England’s proposed regime for “systemic” stablecoins, warning that the central bank’s plans could drive innovation, capital and jobs offshore.
In an sent on 11 December, the MPs and peers, including senior figures such as former Defence Secretary Sir Gavin Williamson and other prominent parliamentarians, argued that the BoE’s proposed caps on how much stablecoin individuals and companies can hold, plus strict limits on how they can be used, risk turning the UK into a “global outlier” just as the government is trying to brand London a hub for digital assets.
Bank of England’s Stablecoin Caps and Restrictions
Under the Bank of England’s consultation, that reach “systemic” scale, which are widely used in payments and are considered a potential threat to financial stability, would face a dedicated regime. That includes temporary holding limits per user, and strict rules on how reserves are managed and how coins are used in wholesale markets.
According to by industry and the lawmakers’ letter, the Bank is considering per-user caps of around £20,000 per stablecoin for individuals and roughly £10 million for businesses, with some exemptions for the largest corporates. Issuers would also be required to keep a large slice of reserves parked at the Bank of England as non-interest-bearing deposits, with the rest in short-dated UK government debt.
At the identical time, most wholesale activity would be pushed into a tightly controlled digital securities, and paying interest on reserves could be effectively prohibited. For the BoE, these measures are about prudence, containing depositor flight risk, protecting bank funding, and making sure new forms of money don’t undermine monetary stability.
Lawmakers Say Bank of England is Capping the Global Market It Aims to Create
Amid the push to become one of Europe’s crypto hubs, the protesting parliamentarians believe the latest move to cap stablecoins is counterintuitive. They warn the UK is “drifting” towards a fragmented, restrictive framework that would push activity into offshore dollar stablecoins like , undermining the very goal of building pound-based digital money infrastructure.
Additionally, GBP-pegged stablecoins are still tiny, with well under 0.1% of the global stablecoin issuance. So, the lawmakers argue that the caps and wholesale restrictions are disproportionate to current systemic risk, especially in a market still in its infancy.
If the UK goes ahead with aggressive per-user caps, strict reserve economics and narrow wholesale use, it risks being the one major jurisdiction that wants stablecoins in theory, but only in small, tightly rationed doses in practice.
The outcome of this clash will assist decide not just the future of GBP-based digital money, but whether London can credibly claim a lead role in the next phase of global finance.
