- The Bank of England plans to cap stablecoin ownership for individuals and for businesses.
- Crypto groups argue the UK proposed limits harm innovation and enforcement feasibility.
- BoE says limits are transitional, aimed at protecting financial stability from rapid outflows.
The Bank of England’s plan to restrict stablecoin ownership is facing sharp criticism from cryptocurrency and payments groups. The central bank has proposed strict caps that could leave the UK out of step with the US and EU.
The proposals include ownership limits of £10,000 to £20,000 for individuals and £10mn for businesses. Officials argue the limits would apply to systemic stablecoins, which are tokens widely used in payments or likely to be in the future. Critics warn the approach risks damaging innovation and undermining the UK’s ability to compete in the global digital economy.
Industry Voices Concerns Over Impact
Industry leaders have been quick to reject the Bank of England’s proposals. Coinbase executive Tom Duff Gordon called the limits harmful. He said no other major jurisdiction had introduced caps and warned that the move would hurt UK savers and businesses.
The UK Cryptoasset Business Council also criticized the plan. Executive director Simon Jennings said limits would be nearly impossible to enforce. He explained that issuers cannot track real-time token ownership without costly new systems, such as digital IDs.
The Payments Association added that restrictions had no equivalent in traditional finance. Riccardo Tordera-Ricchi said there were no limits on cash or e-money, so stablecoin caps made little sense. Other executives warned the limits would reduce the benefits of stablecoins. They highlighted their potential to make cross-border transactions cheaper and faster.
Regulators Defend Stability Goals
Bank of England officials argue the limits are necessary to protect financial stability. Sasha Mills, executive director for financial market infrastructure, defended the proposals. She stated that limits could prevent sudden deposit outflows that weaken credit to businesses and households.
Mills emphasized the transitional nature of the caps. She explained they may be temporary while the financial system adapts to digital money growth. The central bank is expected to publish a consultation later this year with updated rules for stablecoin regulation.
The global stablecoin market has grown to $288bn and continues to expand rapidly. Most tokens are linked to the US dollar, strengthening their role in global finance. The market gained momentum after the US Congress passed the GENIUS Act in July, embedding stablecoins into the financial system. Coinbase forecasts the sector could reach $1.2tn by 2028.
Despite that growth, UK regulation has lagged. Industry analysts argue the country is falling behind key rivals. Gilles Chemla, a professor at Imperial Business School, warned that London risks losing its edge. He noted that talent and infrastructure exist, but delays in rules threaten the city’s leadership in digital markets.
Related: UK Treasury Proposes Stricter Rules for Crypto Firms
Political Tensions Add Pressure
The debate over caps comes amid tension between the Bank of England and the Treasury. Earlier this year, Governor Andrew Bailey intervened to block a meeting aimed at supporting fintech Revolut’s banking licence.
Chancellor Rachel Reeves has publicly supported digital innovation. In her Mansion House speech in July, she pledged to drive blockchain development, including tokenised securities and stablecoins.
The criticism of ownership caps highlights a wider struggle over how the UK balances stability and innovation. Industry groups argue that overly cautious rules will push capital and talent abroad. Regulators maintain that preventing systemic risks must come first.
