Crypto firms across the UK and US are demanding that the BoE ditch its plan to cap stablecoin holdings at £10,000–£20,000 for individuals and £10 million for companies.
This plan, according to Financial Times, would make the UK the only major jurisdiction trying to lock users out of full access to stablecoins, at a time when both the US and EU are expanding regulatory clarity without placing hard limits.
The move, if enforced, would set the UK apart in a way that critics say looks paranoid and counterproductive.
Officials inside the BoE argue that caps are necessary to keep Britain’s banking system stable as crypto expands. They say too much money flowing into stablecoins could drain bank deposits, cut off credit, and cause a ripple effect across lending markets.
Sasha Mills, who heads financial market infrastructure at the bank, said the idea is to prevent “large and rapid outflows of deposits” and limit the impact of new payment systems while they scale. But she also called the measure “transitional,” suggesting it might not be permanent, though there’s no actual timeline or plan to phase it out.
Coinbase says caps are bad for savers and the City
Tom Duff Gordon, Coinbase’s policy chief outside the US, said, “Imposing caps on stablecoins is bad for UK savers, bad for the City and bad for sterling.” He pointed out that no other major country, not even under Donald Trump’s renewed presidency, has tried anything like this.
And it’s not just about ideology; crypto payments are already global, and Tom made it clear that these limits would slam the UK into a corner while the rest of the world moves on.
Simon Jennings, who leads the UK Cryptoasset Business Council, added that enforcing the BoE’s idea would be a technical nightmare. “Limits simply don’t work in practice,” Simon said. “Stablecoin issuers don’t have sight of who holds their tokens at any given time, so enforcing caps would require a costly, complex new system, such as digital IDs or constant co-ordination between wallets.” He said it would be like trying to track who owns physical cash, and spending millions doing it.
Riccardo Tordera-Ricchi, head of policy at The Payments Association, also rejected the proposal outright. “Just as there are no limits on cash, bank accounts, or e-money, there is no reason beyond scepticism to impose limits on stablecoin ownership,” Riccardo said. “This is a step in the wrong direction.” He said the plan would cause more harm than good, especially as stablecoins are already being used for fast, low-cost payments globally.
UK Treasury pushes innovation, BoE resists
The debate is triggering fresh tension between the BoE and the UK Treasury. Rachel Reeves, the UK’s new chancellor, wants to support the crypto industry and grow financial innovation.
She said in her Mansion House speech that she would “drive forward developments in blockchain technology, including tokenised securities and stablecoins.” But Andrew Bailey, the BoE governor, blocked her from meeting regulators to push for a banking licence for Revolut, the country’s biggest fintech still waiting for approval.
The BoE still plans to publish a formal consultation later this year to update its regulatory framework for stablecoins. But crypto groups say even calling for a cap already sends the wrong signal. It tells the global market that the UK sees crypto more as a threat than an opportunity.
Meanwhile, the global stablecoin market has grown to $288 billion and counting. Most of that is US-dollar based. In July, the US Congress passed the Genius Act to regulate stablecoins and integrate them into the official financial system. Coinbase projects that market could reach $1.2 trillion by 2028.
Gilles Chemla, professor at Imperial Business School and co-director of its financial tech research center, said stablecoins aren’t some early-stage tech anymore. “Stablecoins are no longer experimental technologies, they are becoming the foundation of the global digital economy.”
Gilles warned that the UK is losing its advantage. “London has the talent, the markets, and the history to lead the digital economy, but the delay in implementing a regulatory framework for stablecoins is eroding that advantage.”
