UK Stablecoin Holding Caps Provoke Industry Backlash
The Bank of England's proposal to cap individual holdings of stablecoins is facing strong opposition from the crypto industry, with Coinbase CEO Brian Armstrong among its vocal critics. The regulatory move comes as the UK's Financial Conduct Authority (FCA) is also piloting a stablecoin trial. These regulatory shifts in a major market could influence stablecoin design and liquidity on chains like Solana.
- The proposed individual holding cap is £20,000 ($26,350), with a £10 million cap for businesses. The Bank of England has stated these are temporary measures intended to prevent a disorderly shift of deposits from commercial banks into stablecoins. - A key point of industry opposition is the proposed reserve requirements for systemic stablecoins, which would mandate that 40% of backing assets be held in non-interest-bearing accounts at the Bank of England. - In parallel to the Bank of England's proposal, the Financial Conduct Authority (FCA) began a stablecoin sandbox in the first quarter of 2026 to test issuance, payments, and settlement. The four firms selected to participate are Revolut, Monee Financial Technologies, ReStabilise, and VVTX. - The industry's response includes a petition organized by the advocacy group Stand With Crypto UK, which has gathered over 80,000 signatures, nearing the 100,000 required for consideration for a parliamentary debate. - Critics point out that these strict holding limits are not found in other major regulatory frameworks, such as the European Union's Markets in Crypto-Assets (MiCA) regulation or proposed legislation in the United States, potentially putting the UK at a competitive disadvantage. - The Bank of England's rules would primarily apply to sterling-denominated "systemic" stablecoins used for payments, while stablecoins used mainly for cryptoasset trading would fall under the FCA's supervision. - Findings from the FCA's live sandbox trials are expected to directly inform the UK's final stablecoin regulations, which are anticipated to be introduced later in 2026 ahead of a broader crypto framework in 2027.
