Bank of England’s Stablecoin Cap Proposal Criticized as ‘Restrictive’
The post Bank of England’s Stablecoin Cap Proposal Criticized as ‘Restrictive’ appeared on BitcoinEthereumNews.com. In brief The Bank of England proposal would cap stablecoin holdings at £10,000-£20,000 for individuals and £10 million for businesses. A Coinbase executive said the caps would be “bad for UK savers, bad for the City and bad for sterling.” Banking officials in the U.S. have also raised concerns about the market impact of stablecoins. Cryptocurrency groups are urging the Bank of England (BoE) to abandon plans to cap the amount of stablecoins that individuals and businesses can hold in the UK. “Imposing caps on stablecoins is bad for UK savers, bad for the City and bad for sterling,” Tom Duff Gordon, vice-president of international policy at Coinbase, told the Financial Times. “No other major jurisdiction has deemed it necessary to impose caps.” The pushback comes following an FT report that BoE officials plan to continue pursuing the implementation of a 2023 BoE consultation paper on stablecoins. The paper suggested limiting individual holdings of systemic stablecoins—those widely used for payments in the UK or likely to be—to between £10,000 and £20,000 ($13,600–$27,200). Businesses would face a ceiling of around £10 million ($13.6 million). Central bankers argue the restrictions are needed to prevent large outflows from traditional bank deposits, which could threaten credit supply and financial stability. The debate comes as interest in stablecoins is rapidly expanding around the world. Global market capitalization has reached $293 billion, according to CoinGecko. Analysts project the sector could eventually scale into the trillions. That said, similar projections were also made for other crypto endeavours that passed through periods of hype and popularity but ultimately flopped such as NFTs and the metaverse. The UK’s approach contrasts with recent developments abroad. The U.S. Congress passed the GENIUS Act this July, creating a licensing and reserve framework for stablecoin issuers without placing limits on holdings. “This news reinforces how…
The post Bank of England’s Stablecoin Cap Proposal Criticized as ‘Restrictive’ appeared on BitcoinEthereumNews.com.
In brief The Bank of England proposal would cap stablecoin holdings at £10,000-£20,000 for individuals and £10 million for businesses. A Coinbase executive said the caps would be “bad for UK savers, bad for the City and bad for sterling.” Banking officials in the U.S. have also raised concerns about the market impact of stablecoins. Cryptocurrency groups are urging the Bank of England (BoE) to abandon plans to cap the amount of stablecoins that individuals and businesses can hold in the UK. “Imposing caps on stablecoins is bad for UK savers, bad for the City and bad for sterling,” Tom Duff Gordon, vice-president of international policy at Coinbase, told the Financial Times. “No other major jurisdiction has deemed it necessary to impose caps.” The pushback comes following an FT report that BoE officials plan to continue pursuing the implementation of a 2023 BoE consultation paper on stablecoins. The paper suggested limiting individual holdings of systemic stablecoins—those widely used for payments in the UK or likely to be—to between £10,000 and £20,000 ($13,600–$27,200). Businesses would face a ceiling of around £10 million ($13.6 million). Central bankers argue the restrictions are needed to prevent large outflows from traditional bank deposits, which could threaten credit supply and financial stability. The debate comes as interest in stablecoins is rapidly expanding around the world. Global market capitalization has reached $293 billion, according to CoinGecko. Analysts project the sector could eventually scale into the trillions. That said, similar projections were also made for other crypto endeavours that passed through periods of hype and popularity but ultimately flopped such as NFTs and the metaverse. The UK’s approach contrasts with recent developments abroad. The U.S. Congress passed the GENIUS Act this July, creating a licensing and reserve framework for stablecoin issuers without placing limits on holdings. “This news reinforces how…
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