A cross-party coalition of U.K. lawmakers has called on Chancellor Rachel Reeves to step in and ensure Britain’s regulatory framework for stablecoins doesn’t stifle innovation or drive capital overseas, warning that the Bank of England’s current proposals risk risks undermining the City of London’s appeal as the global financial hub.
In a letter dated Dec. 11, 2025, addressed to the Chancellor and signed by prominent MPs and peers including Sir Gavin Williamson, Viscount Camrose, and Baroness Verma, the group said that stablecoins, or digital tokens pegged to an external reference such as traditional fiat currencies, are fast becoming a pillar of the digital economy.
These tokens are reshaping financial transactions by lowering costs, accelerating settlements, and promoting financial inclusion, they argued.
“Stablecoins are reshaping financial infrastructure,” the lawmakers wrote, noting that transactions reached $27.6 trillion in 2024, surpassing combined activity on Visa and Mastercard by nearly 8%. Citibank, they cited, projects this figure could exceed $100 trillion by 2030.
However, they are concerned that the Bank of England’s draft framework, which restricts the use of stablecoins in wholesale markets, bans interest on reserves and caps holding at GBP 20,000, risks leaving the country on the sidelines of the impending wave of financial innovation.
Such limits, they argued, could make pound-backed stablecoins “unattractive,” driving investors toward dollar-pegged alternatives like USDC and USDT, both of which are beyond U.K. regulatory reach.
“The outcome would be a flight from pound-backed digital assets to dollar-based ones, creating a two-tier market in which most on-chain activity is denominated and settled in U.S. dollars,”the lawmakers warned.
Their intervention comes as the U.S. moves aggressively through its GENIUS Act to establish regulatory clarity for digital assets, raising fears that London’s once-unquestioned leadership in fintech and capital markets could be eroded by policy indecision at home.
The letter concluded by calling for a forward-looking stablecoin framework, which will secure international investment, supporting high-value fintech growth and reinforce the U.K.’s position as a global hub of innovation.
secure international investment, support high-value fintech growth, and reinforce
“We welcome your commitment to ‘making the UK a world-leading destination for digital assets.’ Now is the time to deliver on this ambition. We urge you to intervene,” the letter said.
Read: IMF Flags Stablecoins as Source of Risk to Emerging Markets, Experts Say We Aren’t There Yet
