The Bank of England has said it will introduce limits on how many stablecoins people and businesses can hold. According to the Financial Times, the central bank wants individuals capped between £10,000 and £20,000, and businesses at £10 million. These limits would apply to any stablecoin used for payments in the United Kingdom.
Officials say the rule is designed to stop money leaving the traditional banking system too quickly. They fear that if too many people switch deposits into stablecoins, banks would lend less to households and businesses. The central bank described the caps as "transitional" while the financial system adapts to digital money.
Crypto companies have strongly objected; they made the argument that the cap would hurt both investors and the economy at large... Tom Duff Gordon, Coinbase's vice president of international policy, told the Financial Times, "Imposing caps on stablecoins is bad for UK savers, bad for the City and bad for sterling. No other major jurisdiction has deemed it necessary to impose caps."
Industry groups say the rule would be almost impossible to police. Stablecoin issuers do not always know who holds their tokens. This makes it hard to measure whether someone has gone above the limit.
Simon Jennings, executive director of the UK Cryptoasset Business Council, said to the Financial Times, "Limits simply don't work in practice. Stablecoin issuers don't have sight of who holds their tokens at any given time, so enforcing caps would require a costly, complex new system, such as digital IDs or constant co-ordination between wallets."
That would raise costs for companies and users. It could also require a large digital infrastructure that does not yet exist. Payment groups say this level of monitoring could discourage innovation in the UK and push new services abroad.
Supporters of stablecoins say they have the power to make payments cheaper and faster. A PYMNTS report in August noted that many companies such as Visa, PayPal, SoFi, Robinhood and Coinbase are working on cross-border payments that use stablecoins.
Cross-border transactions are often slow, costly, and pass through many intermediaries. According to PYMNTS, stablecoins can settle instantly, lower transaction costs, and improve transparency. They can also make transfers programmable and globally accessible. Industry figures say that if the UK caps holdings, the country could miss these benefits.
Riccardo Tordera-Ricchi of The Payments Association told the Financial Times, "Limits make no sense. Just as there are no limits on cash, bank accounts, or e-money, there is no reason beyond scepticism to impose limits on stablecoin ownership. This is a step in the wrong direction."
The global stablecoin market has already reached $288bn according to the Financial Times. It is mostly driven by dollar-based tokens. Congress gave the sector a major lift in July when it passed the Genius Act, creating a regulatory framework expected to embed stablecoins as part of the financial system. Coinbase has forecast the market could grow to $1.2 trillion by 2028.
Neither the US nor the EU has imposed ownership caps like those the Bank of England is proposing. That difference is why cryptocurrency companies say the UK risks losing ground. The United States has backed stablecoins through legislation, while the EU has focused on creating clear regulatory standards without limiting how much can be held.