A committee within the U.K. House of Lords has called on the Bank of England to reconsider several proposed restrictions on stablecoins, arguing that overly strict rules could hinder innovation and reduce the country’s competitiveness.
A new report from the Financial Services Regulation Committee said limits on how much stablecoin consumers can hold might not be needed right now. The committee suggested that regulators monitor the sector’s growth and add restrictions only if clear financial stability risks emerge.
The Bank of England had previously proposed limits of £20,000 for individual stablecoin holdings and £10 million for businesses. Industry participants argued that such restrictions could place the U.K. at a disadvantage compared with jurisdictions adopting more flexible approaches.
The committee also raised concerns about proposals that would require stablecoin issuers to keep at least 40% of their reserves in non-interest-bearing central bank deposits. Lawmakers said this rule could make it much harder for stablecoin businesses to operate in Britain.
Stablecoins have become a major focus for regulators worldwide as governments seek to balance innovation with financial stability. These digital assets are designed to maintain a stable value by being linked to traditional currencies such as the U.S. dollar or British pound.
Senior Bank of England officials have admitted that some of their original proposals might have been too strict. This has given the crypto sector hope that regulators may soon take a more industry-friendly approach.
This debate is part of a larger global competition among financial centres to attract digital asset companies while maintaining strong regulatory standards.
UK House of Lords Committee Calls on Bank of England to Reconsider Proposed Stablecoin Restrictions
The debate around stablecoin regulation is heating up, with UK lawmakers urging the Bank of England to rethink rules that could impact innovation, competition, and the future of… pic.twitter.com/1oTz1LizoX
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