The Bank of England is considering imposing limits on stablecoins, raising concerns within the crypto industry and among experts.
Bank of England's Plans for Stablecoin Limits
According to a Financial Times report from September 15, the Bank of England plans to set limits on stablecoin holdings. Proposed limits for individuals may range from £10,000 to £20,000 ($13,600 to $27,200), while businesses could be capped at around £10 million ($13.6 million). The Bank asserts these measures aim to prevent sudden deposit withdrawals and limit the growth of alternative payment systems.
Crypto Industry's Response
Crypto industry representatives and Coinbase's executive director have expressed concerns that the proposed rules may stifle growth and exacerbate already existing competition. Tom Duff Gordon indicated that 'imposing caps on stablecoins is bad for UK savers and the financial system as a whole.' Concerns were also raised about the feasibility of enforcing these limits without the implementation of complex digital identification systems.
Comparison with the US and EU
In contrast to the Bank of England's proposals, both the US and EU are adopting measures that foster stablecoin market development. The EU has already implemented the MiCA regulation aimed at creating a legal framework for crypto assets, while the US enacted the GENIUS Act that establishes guidelines for stablecoins. Both acts do not impose limits on the amounts of stablecoins citizens can hold.
The Bank of England's plans to limit stablecoin holdings raise significant attention and criticism from industry professionals, underscoring the need for balanced regulatory policies in a rapidly evolving digital financial landscape.
