Cryptocurrency advocates are pushing back against the Bank of England’s (BoE) proposed limits on stablecoin ownership, arguing that these restrictions could place the UK at a competitive disadvantage compared to other major economies. The Financial Times reported on Monday that crypto groups are urging the central bank to reconsider its plans to impose caps on the amount of stablecoins individuals and businesses can own.
Proposed Caps Stir Controversy
The BoE’s proposed limits would cap stablecoin holdings at £10,000 to £20,000 ($13,600–$27,200) for individuals and approximately £10 million ($13.6 million) for businesses. These restrictions apply to systemic stablecoins—those already widely used for payments in the UK or expected to gain significant traction. BoE officials, including Sasha Mills, the executive director for financial market infrastructure, argue that these caps are necessary to prevent large-scale outflows of deposits from traditional banks, which could undermine financial stability and credit provision.
However, the crypto industry is sounding the alarm, claiming the rules are impractical and would leave the UK with stricter oversight than the U.S. or the European Union (EU). Tom Duff Gordon, Coinbase’s vice president of international policy, criticized the proposal, stating, “Imposing caps on stablecoins is bad for UK savers, bad for the City, and bad for sterling.” He pointed out that no other major jurisdiction has imposed similar limits.
Challenges to Implementation
Industry executives have also raised concerns about the feasibility of enforcing such caps. Simon Jennings of the UK Cryptoasset Business Council emphasized that implementation would be nearly impossible without new systems, such as digital IDs, to track ownership accurately. Riccardo Tordera-Ricchi of The Payments Association echoed these sentiments, arguing that the proposed limits “make no sense” given the absence of caps on cash or bank account holdings.
The enforcement challenges are further compounded by the global nature of cryptocurrencies. Unlike traditional financial systems, cryptocurrencies can be easily transferred across borders, making it difficult for national regulators to monitor and control ownership effectively.
International Perspectives
The BoE’s proposals stand in stark contrast to regulatory approaches in the United States and the EU. In the U.S., the recently enacted GENIUS Act establishes a federal framework for payment stablecoins, focusing on licensing, reserve, and redemption standards for issuers, without capping individual holdings. This approach aims to provide a secure and regulated environment for stablecoin transactions while allowing for growth and innovation in the sector.
Similarly, the EU’s Markets in Crypto-Assets Regulation (MiCA), which took full effect last year, does not impose limits on stablecoin holdings. Instead, MiCA emphasizes reserves, governance, and oversight by national regulators. This regulatory framework is designed to ensure the stability and security of the crypto market while fostering a competitive and dynamic environment.
Potential Implications for the UK
Critics warn that if the BoE moves forward with its proposed caps, the UK could find itself at a disadvantage in the rapidly evolving global crypto market. By imposing stricter rules than its international counterparts, the UK risks becoming less attractive to crypto businesses and investors seeking a more open and flexible regulatory environment.
Moreover, limiting stablecoin ownership could stifle innovation within the UK’s financial sector. Stablecoins, with their ability to facilitate quick and low-cost transactions, are seen as a key component of future payment systems. By imposing caps, the BoE may inadvertently hinder the development of these systems, leaving the UK trailing behind in the global race to modernize financial infrastructure.
Finding a Balance
While the BoE’s concerns about financial stability and the potential risks associated with the rapid growth of stablecoins are valid, critics argue that there must be a balance between regulation and innovation. Rather than imposing restrictive caps, some suggest that the BoE should focus on ensuring transparency, accountability, and robust oversight of stablecoin issuers.
As the debate continues, the BoE faces the challenge of crafting a regulatory framework that addresses the risks posed by stablecoins while fostering a competitive and innovative financial environment. The outcome of this debate will likely have significant implications for the future of the UK’s crypto landscape and its position in the global market.
With the clock ticking, all eyes are on the Bank of England as it navigates the complex intersection of regulation, innovation, and financial stability in the dynamic world of cryptocurrencies.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
