The Bank of England’s proposal to impose strict limits on how much stablecoin individuals and companies can own has reportedly triggered a backlash from the crypto industry, which says the measure risks stifling growth and putting Britain behind its peers.
Officials have suggested ownership caps of between £10,000 and £20,000 ($13,600 to $27,200) for individuals and £10m ($13.6m) for businesses on systemic stablecoins, those widely used for payments or likely to become so.
He pointed out that no other major jurisdiction has chosen to restrict ownership in this way. The central bank’s caution reflects concerns that widespread use of stablecoins could drain deposits from traditional banks and weaken the financial system.
Industry groups argue the approach is unnecessarily heavy-handed. Tom Duff Gordon, vice-president of international policy at Coinbase, told the Financial Times that imposing caps would be “bad for UK savers, bad for the City and bad for sterling.”
The proposal threatens to deepen tensions between the Bank of England and the Treasury, which has signalled support for digital innovation in financial services. Chancellor Rachel Reeves said in July she wanted to drive forward developments in blockchain technology, including tokenized securities and stablecoins.
Enforcing caps, he argued, would require complex and costly systems such as digital IDs or constant coordination between wallets.
For UK firms, the concern is clear. They fear that limits on ownership will curb adoption. As a result, business could shift overseas. Meanwhile, supporters of stablecoins argue the opposite.
The stablecoin market is now a fast-growing part of global finance. It is valued at around $288b. Most of that value comes from dollar-based tokens. Looking ahead, Coinbase has forecast the sector could expand to US$1.2 trillion by 2028.
