Aave Founder Torches BoE’s £20K Stablecoin Limit: ‘UK Chooses to Be Crypto Losers’

DeFi heavyweight Stani Kulechov just dropped a Molotov cocktail on Threads—and the Bank of England’s £20,000 stablecoin cap is burning.

Regulatory self-sabotage?

The Aave founder’s rant exposes the UK’s crypto paradox: chasing ‘innovation hubs’ while kneecapping adoption. That £20K ceiling isn’t consumer protection—it’s a neon ‘closed for business’ sign for blockchain firms.

London’s loss, Dubai’s gain

While British bureaucrats play spreadsheet games, stablecoin transactions elsewhere hit $7 trillion last quarter. Guess who’s picking up the fleeing talent? (Hint: Their sandbox doesn’t include sandbagging.)

Kulechov’s verdict lands like a bankruptcy gavel: ‘Congratulations on winning the race to irrelevance.’ Ouch—but when TradFi dinosaurs applaud your policy, maybe check the carbon dating.

Kulechov’s comment on the proposal

Kulechov noted that these stablecoins would prove “inefficient, uncompetitive and unattractive compared with global alternatives.” He also expressed his concern about HM Treasury potentially following the BoE’s path, with the policy fostering only negative outcomes. 

He called the UK and its consumers “losers.” According to him, this move was a missed opportunity and a misguided effort on the BoE’s part.

A user replied to his post, saying, “Completely agree — this approach misunderstands what makes stablecoins powerful in the first place.”

Broader context

Under the proposal, individuals would be restricted to holding £20,000 in any systemic stablecoin, while businesses would be capped at £10 million. The bank justified these measures as necessary to manage the risk of rapid, large-scale deposit outflows from traditional commercial banks, which could impair lending to households and businesses. These limits would remain until regulators judge the risk of such outflows to have subsided. 

The BoE’s framework also establishes backing and oversight requirements for systemic stablecoin issuers. Issuers would hold up to 60% of their reserves in short-term UK government debt, with the remaining 40% held as unremunerated deposits at the Bank of England. 

There is still time for BoE

While the Bank of England claims the proposals balance innovation with safety, Kulechov argues that placing such restrictive caps could hinder the growth of the UK’s fintech sector. 

The consultation period for the proposed rules is open until early 2026, giving the crypto industry and traditional financial (TradFi) institutions time for changes before the final framework is implemented.

Also Read: Bank of England Proposes £20,000 Limit on Stablecoin Holdings