Bank of England’s Proposal on Stablecoins
The cryptocurrency sector is voicing strong objections to the Bank of England’s recent proposal aimed at limiting the amount of stablecoins that individuals can invest in. This initiative, reported by the Financial Times, suggests that the UK would adopt more stringent regulations on stablecoins than those currently in place in the United States or the European Union.
Proposed Investment Limits
Bank of England officials have previously stated that they intend to advance measures that would place restrictions on all major systemic stablecoins. Under their proposed framework, individual investors would be restricted to holding between £10,000 and £20,000, while businesses would face a limit of £10 million. This regulatory approach stems from the Bank’s concern that stablecoins might undermine the stability of financial institutions by diverting deposits away from traditional banks.
Industry Concerns
The proposed regulation reflects a distinctly cautious stance from the UK government regarding cryptocurrency, especially when compared to other global jurisdictions which have adopted more lenient measures. Industry representatives argue that these proposed restrictions could disadvantage the UK in the competitive landscape of cryptocurrency markets, complicating adherence to regulations and potentially incurring high implementation costs.
The backlash from the cryptocurrency and payments sectors underscores the tension between innovation and regulatory oversight in the digital currency domain.
