Crypto Firms Want UK to Relax Stablecoin Ownership Caps

Cryptocurrency companies are reportedly lobbying the Bank of England to rethink its stablecoin ownership limits.

The restrictions would give the United Kingdom more stringent rules for the stablecoin sector than the United States or the European Union, the Financial Times reported Monday (Sept. 15).

The Bank of England is set to propose limits on individual stablecoin ownership of 10,000 pounds to 20,000 pounds (about $13,600 to $27,200), with businesses being restricted to 10 million pounds, the report said. The limits apply to systemic stablecoins, or any coins widely used for U.K. payments or likely to be used for that purpose in the future.

The plan has attracted criticism from crypto and payment companies, which said it would put the U.K. at a disadvantage and be difficult and expensive to enforce, according to the report.

“Imposing caps on stablecoins is bad for U.K. savers, bad for the city and bad for sterling,” Tom Duff Gordon, vice president of international policy at Coinbase, said, per the report. “No other major jurisdiction has deemed it necessary to impose caps.”

The central bank has said its proposed ownership limits could be “transitional” as the financial system adjusts to the growth stablecoins, the report said.

Other industry figures said the limits would be tough to implement and would hinder stablecoins’ potential benefits, like streamlining cross-border payments, according to the report.

“Limits simply don’t work in practice,” Simon Jennings, executive director of the UK Cryptoasset Business Council, said, per the report.

“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 coordination between wallets,” he added, according to the report.

Meanwhile, several companies, including SoFi, Coinbase, Visa, PayPal and Robinhood, are focused on the increasing role stablecoins are playing in cross-border payments, PYMNTS reported Aug. 4.

“Cross-border payments represent a sprawling and inefficient market, with most transactions consisting of B2B flows,” the report said. “The inefficiencies in this system include multiday settlement times, high fees, limited transparency and heavy reliance on intermediaries. Stablecoins offer a technical alternative capable of addressing these pain points—instantly settled transactions, lower costs, programmable transfers and global accessibility.”