The Bank of England (BoE) has found itself at the center of heated criticism from the global crypto industry after unveiling proposals to introduce strict limits on stablecoin ownership. According to the regulator’s draft framework, individuals could face caps of £10,000 to £20,000, while businesses might be limited to holdings of up to £10 million. The BoE argues that these restrictions are necessary to mitigate potential risks to the financial system, particularly in cases of sudden mass withdrawals that could destabilize credit and liquidity.
However, the response from crypto firms, industry associations, and academics has been overwhelmingly negative. Many argue that the UK risks undermining its competitiveness in the rapidly evolving digital finance space. Coinbase Vice President for International Policy, Tom Duff Gordon, criticized the plan, warning that such restrictions would be harmful not only to British investors but also to London’s position as a global financial hub. According to him, no other major jurisdiction has introduced similar caps, leaving the UK at risk of falling behind the US and the EU, which are moving toward more innovation-friendly frameworks.
The UK Cryptoasset Business Council echoed this sentiment, highlighting the impracticality of enforcing ownership limits. CEO Simon Jennings emphasized that stablecoin issuers do not have visibility into the identities of token holders, meaning the proposed limits would require complex and costly mechanisms such as digital IDs or continuous wallet monitoring. This, critics argue, could introduce unnecessary friction into an already sophisticated financial ecosystem.
The Payments Association also joined the backlash, with policy director Riccardo Tordero-Ricci stressing that there are no equivalent caps on cash, bank deposits, or electronic money. In his words, the proposal is driven more by skepticism than by sound regulatory reasoning. The academic community has also voiced concerns. Professor Gilles Chemla of Imperial College Business School warned that stablecoins are no longer an experimental technology but a cornerstone of the global digital economy. London, he argued, has the talent and market infrastructure to lead in this area, but delays and restrictive regulation could erode that advantage.
The debate comes at a time when the global stablecoin market has surged to $288 billion, driven largely by tokens pegged to the US dollar. Analysts predict explosive growth, with Coinbase forecasting the sector to hit $1.2 trillion by 2028. In July, the US Congress passed the GENIUS Act, which formally integrated stablecoins into the financial system under a clear regulatory framework, signaling a sharp contrast to the BoE’s restrictive stance.
The BoE has stressed that these measures could be temporary, serving as transitional safeguards while the financial system adapts to the widespread use of digital assets. A detailed consultation paper on the regulation of stablecoins is expected later this year.
Conclusion: While the Bank of England sees ownership limits as a way to protect financial stability, the global crypto industry views them as a step backward. With the US and EU embracing more supportive frameworks, the UK now faces a pivotal choice: either adapt to the realities of digital finance or risk losing its status as a global financial leader in the age of stablecoins and tokenized money.
