{"id":63383,"date":"2025-12-13T06:46:31","date_gmt":"2025-12-13T06:46:31","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=63383"},"modified":"2025-12-13T06:46:31","modified_gmt":"2025-12-13T06:46:31","slug":"uk-lawmakers-oppose-bank-of-englands-stablecoin-ownership-cap-proposal-in-new-letter","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=63383","title":{"rendered":"UK Lawmakers Oppose Bank Of England\u2019s Stablecoin Ownership Cap Proposal In New Letter"},"content":{"rendered":"
\n

A cross-party group of UK lawmakers jointly expressed concerns about the Bank of England (BOE)\u2019s proposal to limit stablecoin holdings in the country, urging Chancellor\u00a0Rachel Reeves\u00a0to push back on the controversial policy.<\/p>\n

UK Lawmakers Fight Stablecoin Cap Plans<\/h2>\n

On Thursday, a coalition of UK lawmakers sent a letter asking Chancellor\u00a0Rachel Reeves to oppose some of the Bank of England\u2019s stablecoin-related policies that could undermine the government\u2019s efforts to position the UK as one of the leading nations in the digital assets industry.<\/p>\n

In the letter reviewed<\/a> by Bloomberg, members of the House of Lords, the House of Commons, and peers highlighted how stablecoins are reshaping financial infrastructure by lowering costs, accelerating settlements, and promoting financial inclusion.<\/p>\n

\u201cTheir rise is also enabling traditional institutions to connect with the digital asset ecosystem and modernise legacy infrastructure,\u201d it noted, \u201cPowerful tailwinds are rapidly driving a major shift across financial services as we know them.\u201d<\/p>\n

However, they argued that BOE\u2019s proposal to cap stablecoin ownership could \u201crisk preventing the UK from fully capitalising on these opportunities,\u201d drive innovation offshore and investors to USD-pegged alternatives, while potentially positioning the UK \u201cas a global outlier.\u201d<\/p>\n

\u201cWe are deeply concerned that the UK is drifting towards a fragmented and restrictive approach that will deter innovation, limit adoption, and push activity overseas,\u201d the coalition wrote in the letter.<\/p>\n

As reported<\/a> by Bitcoinist, the BOE released a new consultation paper on its proposed regulatory framework for sterling-denominated systemic stablecoins in November. The proposed rules, built on feedback received on the November 2023 Discussion Paper, addressed backing rules and holding limits.<\/p>\n

Among the controversial policies, the Bank proposed to temporarily cap stablecoin ownership to \u201cmitigate financial stability risks stemming from large and rapid outflows of deposits from the banking sector.\u201d<\/p>\n

The restriction would impose limits of \u00a310,000 to \u00a320,000 for individuals and \u00a310 million for businesses, resembling its proposed approach to the digital pound, also aimed at addressing financial stability risks.<\/p>\n

MPs Call BOE\u2019s Policies \u2018An Own Goal\u2019<\/h2>\n

In a statement to Bloomberg, a Treasury spokesperson said that they \u201cwant the UK to be a global leader in digital assets, providing certainty for firms and boosting consumer confidence by bringing cryptoassets under regulation.\u201d<\/p>\n

\u201cOur approach will be fair and proportionate, and we continue to work closely with the Bank of England on the UK approach to stablecoins,\u201d the spokesperson affirmed, adding, \u201cTheir recent consultation provides an invaluable opportunity for stakeholders to provide views.\u201d<\/p>\n

Earlier this week, the Financial Conduct Authority (FCA) stated<\/a> that stablecoin payments will be a priority for the next year. In a letter sent to the Prime Minister on Tuesday, the regulatory agency pledged to \u201cfinalise digital assets rules and progress UK-issued sterling stablecoins\u201d in 2026.<\/p>\n

However, the report noted that the overall perception among lawmakers and market participants is that the UK is falling behind other jurisdictions, including the US, which introduced<\/a> a comprehensive regulatory framework for stablecoins in July.<\/p>\n

It\u2019s worth noting that the BOE suggested that systemic stablecoin issuers be required to hold at least 40% of the reserves backing the token as unremunerated deposits at the central bank to ensure \u201crobust redemption and public confidence, even under stress.\u201d Meanwhile, issuers would be allowed to hold up to 60% of backing assets in short-term UK government debt.<\/p>\n

Lawmakers consider that requiring<\/a> all reserves backing sterling-pegged tokens to be held in the UK is a \u201cmassive own goal\u201d that will limit the relevance of the pound. \u201cTo remain globally competitive, the UK must ensure its stablecoin framework is benchmarked against leading international models,\u201d the lawmakers concluded.<\/p>\n

\"stablecoin,<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A cross-party group of UK lawmakers jointly expressed concerns about the Bank of England (BOE)\u2019s proposal to limit stablecoin holdings in the country, urging Chancellor\u00a0Rachel Reeves\u00a0to push back on the controversial policy. UK Lawmakers Fight Stablecoin Cap Plans On Thursday, a coalition of UK lawmakers sent a letter asking Chancellor\u00a0Rachel Reeves to oppose some of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-63383","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/63383","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=63383"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/63383\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=63383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=63383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=63383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}