UK Lawmakers Urge Rachel Reeves To Block Bank Of England Stablecoin Plan

UK lawmakers are urging Chancellor Rachel Reeves to block the Bank of England’s (BOE) plan to cap stablecoin holdings, warning it could drive investment and growth out of the country.

The cross-party lawmakers from the House of Lords said in a Dec. 11 letter to Reeves reported by Bloomberg that the BOE’s proposal risks slowing adoption and pushing activity offshore.

The plan puts a £20,000 cap on holdings by individuals, a £10 million limit on business holdings, and requires issuers to hold a 40% reserve in unremunerated deposits at the central bank,

The lawmakers, including CMC Markets CEO Peter Cruddas, warn the UK could fall behind the US as it advances clearer, more liberal stablecoin rules, potentially steering users toward dollar-based tokens and undermining the UK’s competitive position.

“We welcome your commitment to ‘making the UK a world-leading destination for digital assets,”’ the letter said. “Now is the time to deliver on this ambition. We urge you to intervene.’’

Other signatories of the letter included Emma Pidding, Kulveer Singh Ranger, Jonathan Berry, and former defense secretary Gavin Williamson. Ranger noted that while regulation is welcome, strict caps could put the UK at a disadvantage.

The UK Treasury said it aims for a fair and balanced approach, working closely with the BOE and considering feedback from stakeholders to support both innovation and consumer confidence.

UK Lawmakers: BOE Stablecoin Plan Risks UK Crypto Growth

The lawmakers noted that stablecoin transactions hit $27.6 trillion in 2024, more than Visa and Mastercard combined, and could exceed $100 trillion by 2030.

With the US advancing a clear regulatory framework for stablecoins via its GENIUS Act, which was passed into law in July, the lawmakers urged the government to act now with a forward-looking framework to protect investment, fintech growth, and the UK’s global leadership.

Without that, they said, the risk is that dollar-denominated stablecoins will dominate the market.