A debate has erupted in the UK over the Bank of England’s plans to restrict the ownership of stablecoins — cryptocurrencies pegged to the dollar, euro, or other stable assets.
The regulator fears that if people transfer their money from banks to such digital assets en masse, it could hit the banking system. Therefore, a limit is being discussed: for ordinary citizens — no more than £10-20 thousand (approximately $13.6-27.2 thousand), for companies — up to £10 million.
If the decision is adopted, the UK will become one of the strictest countries in regulating stablecoins — stricter than the US and the EU.
Representatives of the crypto industry consider such steps harmful. According to them, the restrictions will reduce the country’s attractiveness to investors; it will be more difficult and expensive for people to use digital currencies; the control system itself will prove to be too complex and costly, as stablecoin issuers do not know who owns their tokens at any given moment.
“The introduction of limits will hit depositors, the City of London, and even the pound,” said Coinbase Vice President Tom Duff Gordon. “No other major country has introduced such measures.”
Supporters of stablecoins emphasize that they could make international transfers faster and cheaper.
The Bank of England responds that the restrictions will be temporary — to give the financial system time to adjust to the new digital money market. “A massive outflow of funds from banks could lead to a reduction in lending to businesses and the public,” explained regulator representative Sasha Mills.
Finance Minister Rachel Reeves has previously stated that the government will support the development of blockchain technologies, including the use of stablecoins.
The global market for these digital currencies is currently estimated at approximately $288 billion.
