Bank of England’s Stablecoin Limits Face Backlash
- The Bank of England proposed capping stablecoin holdings at £20,000 for individuals and £10 million for businesses.
- These rules apply only to sterling-backed “systemic stablecoins” and exclude existing stablecoins like USDT.
- Issuers would need to hold up to 60% of backing assets in short-term UK government debt, with the rest in non-interest-bearing Bank of England accounts.
- British lawmakers, including members of the House of Lords, have urged reconsideration, warning that caps could stifle innovation.
- The GENIUS Act in the U.S., signed into law by President Donald Trump, does not impose such caps on stablecoin holdings.
Industry leaders and politicians argue that the proposed limits on stablecoin holdings could drive financial activity overseas and hinder innovation in the UK’s digital finance sector.
The Bank of England’s proposal aims to manage risks as digital money adoption grows but faces criticism for potentially putting the UK at a competitive disadvantage compared to other jurisdictions without such restrictions. (Source)
