CoinDesk
The UK Parliament's House of Lords Financial Services Regulation Committee has called on the Bank of England to reconsider its proposed stablecoin restrictions, warning the rules risk making Britain uncompetitive in a fast-developing market. The cross-party committee's report, titled "Stablecoins: waiting for regulation," challenges both the BOE's proposed holding caps and its backing-asset requirements.
Why it matters
The BOE's current proposals would cap individual stablecoin holdings at £20,000 ($27,000) and business holdings at £10 million ($13.5 million), while requiring issuers to park at least 40% of backing assets in unremunerated central bank deposits — rules that industry figures have called unnecessarily stern. The Lords committee argues the BOE should instead monitor market growth and only impose holding limits "if the financial stability risks clearly warrant it," rather than pre-emptively constraining a nascent GBP stablecoin market. The 40% unremunerated deposit requirement drew particular scrutiny, with the committee warning it "could have a significant impact on the business viability of stablecoin issuers in the U.K."
Market impact
The BOE itself appears to be moving in the committee's direction. Deputy Governor Sarah Breeden acknowledged last month that the proposed restrictions were "overly conservative" and said the central bank is "looking very hard at whether there are different ways we can manage" the risks. A meaningful rollback of the holding caps and the backing-asset floor would materially improve the commercial case for GBP-denominated stablecoin issuance, potentially positioning the UK as a competitive hub alongside the EU's MiCA framework and US stablecoin legislation currently advancing through Congress.
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