The Bank of England’s proposal to impose limits on stablecoin ownership has stirred backlash from the crypto industry.
The BOE’s proposal required strict limits on how much stablecoin individuals and companies can own, and crypto firms worry that the measure risks stunting growth and putting Britain behind its peers.
The BoE’s stance contradicts the industry’s pro-development strategy
The bank suggested ownership limits of between GBP 10,00 and GBP 20,000 for individuals, and GBP 10 million for businesses on systemic stablecoins, widely used for payments or likely to become so. The suggestion comes as the BOE develops a regulatory framework for digital tokens pegged to fiat currencies in collaboration with the FCA.
Industry players, including Coinbase, argue that this approach is unnecessary and that imposing caps will bring negative outcomes for UK savers and for the British pound. They also argue that no other region, including Europe, has chosen to restrict stablecoin ownership in this way, and issuers cannot be able to monitor who holds their tokens at any given time. However, the BoE’s caution stems from concerns regarding the widespread use of stablecoins, which could drain deposits from traditional banks and weaken the financial system. Officials insist that these limits could be transitional while the market adjusts to the rise of money digitalisation.
The UK Cryptoasset Business Council said monitoring would require complex and costly systems, such as digital IDs or constant coordination between wallets. These contradicting ideologies may deepen the tension between the BoE and the Treasury, which has signalled support for digital innovation in financial services. Crypto firms fear that the limit will negatively impact adoption, and businesses will shift overseas as a result. Meanwhile, supporters of stablecoins argue the opposite, saying that the tokens can cut the cost and time of international payments and drive wider innovation in financial services.
The BoE will publish an official consultation this year, highlighting its updated approach to regulating the assets. Yet, industry representatives are urging the bank to reconsider as they warn of a potential fallback for the UK without flexible rules.
