UK MPs warn that proposed limits on stablecoin holdings and interest could curb innovation and trigger capital flight to foreign markets.
A cross-party group of UK MPs has called on Finance Minister Rachel Reeves to amend the Bank of England’s proposed stablecoin framework. The letter warns that restrictions, including a £20,000 holding cap and bans on interest on reserves, may suppress innovation and prompt investors to move funds abroad. Lawmakers fear these regulations could diminish the appeal of pound-backed stablecoins compared to dollar-backed options, affecting the UK's competitiveness in fintech.