The Bank of England has unveiled a proposal to impose strict ownership limits on stablecoins, with individual holdings capped between £10,000 and £20,000 ($13,600-$27,200) and business holdings limited to approximately £10 million ($13.6 million). These restrictions target "systemic stablecoins" - tokens already widely used for payments in the UK or expected to be in the future.
Officials argue these measures are necessary to mitigate risks to financial stability, particularly the possibility of mass deposit outflows from banks if consumers and corporations shift large sums into stablecoins. The Bank of England's executive director for financial market infrastructure, Sasha Mills, stated the limits would mitigate risks from sudden deposit withdrawals and the scaling of new systemic payment systems.
Industry reaction has been swift and overwhelmingly negative. Major crypto groups including Coinbase, the UK Cryptoasset Business Council, and The Payments Association have warned that the proposals are unworkable and would leave the UK at a competitive disadvantage compared to jurisdictions such as the United States and European Union, where no similar ownership caps exist.
Tom Duff Gordon, Coinbase's vice president of international policy, called the caps "bad for U.K. savers, bad for the City and bad for sterling," while Simon Jennings of the UK cryptoasset business council noted enforcement would be nearly impossible without new systems such as digital IDs. Critics also point out that there are no caps on cash or bank accounts, making the stablecoin restrictions inconsistent.
The consultation process is ongoing, with stakeholders invited to provide feedback before the proposals are finalized. The coming months will be crucial in determining whether the UK pursues its current cautious approach or adjusts course to align more closely with global competitors.