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The Bank of England (BoE) is under scrutiny after floating proposals to impose ownership limits on systemic stablecoins, suggesting caps of £10,000–£20,000 for individuals and £10 million for businesses.
According to the central bank, the move is aimed at safeguarding financial stability and preventing an outflow of deposits from traditional banks, as users increasingly turn to stablecoins for their 24/7 payment capabilities and interest-bearing features.
However, the proposals have been met with criticism from the digital asset industry. Nick Jones, founder and CEO of Zumo, argued that the BoE’s stance reflects a persistent scepticism towards crypto innovation.
“No other major jurisdiction is proposing restrictions of this kind. Such limits risk stifling growth and undermining the UK’s competitiveness in a global digital economy that is already becoming heavily dollarised,” he said.
The UK’s approach diverges sharply from other major markets. In the United States, regulators are moving toward a more accommodative framework through the Genius Act, while the European Union has introduced its Markets in Crypto-Assets (MiCA) regulation, which provides structured oversight without imposing holding caps.
Industry bodies have also raised concerns over enforceability. Simon Jennings, executive director of the UK Cryptoasset Business Council, stressed that restricting holdings would be nearly impossible to implement.
“Stablecoin issuers cannot track individual token ownership in real time. Enforcing such limits would require expensive infrastructure such as digital IDs or constant wallet monitoring,” he noted.
The BoE has said it will release a formal consultation later this year, detailing its regulatory direction for stablecoins and addressing industry feedback, particularly around allowing returns on assets backing the tokens.
The debate underscores the balancing act between innovation and stability, as the UK seeks to position itself as a hub for digital finance while avoiding systemic risks.
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