Bank of England proposes stablecoin holding limits, sparking industry backlash

The Bank of England is pursuing stringent regulations to limit individual and corporate holdings of stablecoins, creating significant friction with the industry, the Financial Times reported. The proposed rules would apply to all stablecoins currently used or potentially used for payments in the UK. Under the plan, individuals would be capped at holding between £10,000 and £20,000 (approximately $12,700 to $25,400), while the limit for corporations would be £10 million (around $12.7 million). The local crypto industry argues that the plan would put the UK at a competitive disadvantage and that implementation would be administratively difficult and excessively costly. However, the Bank of England believes stablecoins could reduce bank deposits, which in turn could negatively impact lending to individuals and businesses. The move also highlights a growing divide between the central bank and the UK Treasury, which is actively working to support stablecoins and tokenization.