BoE Faces Industry Revolt Over Controversial Stablecoin Ownership Caps

Financial heavyweights push back against Bank of England's proposed stablecoin restrictions—calling them anti-innovation and potentially damaging to UK's fintech ambitions.

Market Impact: Limiting ownership could strangle liquidity and drive crypto businesses offshore—just when traditional finance finally embraces digital assets.

Regulatory Tension: The BoE's conservative stance clashes with industry demands for pragmatic frameworks that protect consumers without stifling growth.

Global Implications: As other jurisdictions roll out red carpets for crypto innovation, Britain risks becoming a regulatory backwater—because nothing says 'global financial hub' like capping ownership of the very assets revolutionizing finance.

BoE’s stablecoin limits spark tensions and delay UK crypto edge

The debate has heightened tensions between the BoE and the Treasury, especially after BoE Governor Andrew Bailey intervened to delay a fintech banking license for Revolut. Chancellor Rachel Reeves has pledged to advance blockchain technology, including stablecoins, to support UK financial innovation. 

The BoE has described the limits as potentially “transitional” to help the financial system adapt to digital currencies. It plans to release a consultation on stablecoin regulation later this year. Gilles Chemla, a professor at Imperial Business School, warned that the UK risks falling behind in stablecoin regulation. “London has the talent and markets to lead the digital economy, but delays in regulatory frameworks are eroding that edge,” he said.

On July 3, 2025, the Bank of England cautioned that the growing popularity of stablecoins could undermine public confidence in conventional currency.

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