London, UK – [13 November 2025] — Leading cryptocurrency firms and industry bodies have issued a stark warning over the Bank of England’s recently released consultation proposals for the regulation of sterling-denominated stablecoins. The proposed framework which includes asset backing requirements, caps on holdings and new prudential oversight is being criticised as overly restrictive, potentially stifling innovation and undermining the competitiveness of the UK’s digital-asset sector. This press release is about Crypto Leaders Flag Deep Concerns Over Bank of England’s Stablecoin Rules.
Key Industry Objections
• Holding Caps Seen as Impractical and Innovation-Restrictive
Under the Bank of England’s consultation, individuals would be limited to holdings of £20,000 in a systemic stablecoin, and most businesses to £10 million.
Industry leaders argue these limits are unprecedented, harder to enforce than existing bank deposit caps, and risk driving both talent and issuance offshore.
“Ownership limit remains a key issue… it will certainly lead to pound sterling-denominated stablecoins being less competitive.” — Konstantinos Adamos, Group Head of Legal, Revolut
Reserve Backing Requirements Impact Business Viability
The proposals require systemic stablecoin issuers to hold at least 40% of backing assets in unremunerated deposits at the Bank of England, while up to 60% may be held in short-term UK government securities.
Industry voices contend that restricting income-generating backing assets undermines issuer viability and could limit the growth of sterling-based digital money.
“You can’t earn interest under the new model — so you have to pivot your business entirely.” — Industry representative
Risks for UK’s Crypto & Fintech Ecosystem
- Competitive Disadvantage: With the US and EU moving to more permissive stablecoin regimes, the UK may lose its edge as a global crypto hub.
- Innovation Flight: Firms may choose to issue stablecoins elsewhere, postponing UK-based developments and undermining the domestic ecosystem.
- Market Fragmentation: Holding caps could drive usage into unregulated or foreign stablecoins, reducing transparency and regulatory control.
- Unclear Classification of “Systemic”: The threshold for what constitutes a “systemic” stablecoin is still vague — risking legal uncertainty for issuers and investors alike.
What Industry Wants to See Instead
- Clearer, harmonised definitions of systemic vs non-systemic stablecoins, aligned with global jurisdictions.
- Removal or substantial increase of individual and business holding caps to allow scale.
- Ability for issuers to earn a reasonable return on backing assets, enabling sustainable business models.
- A transitional regime recognising industries in growth mode, avoiding a “spring-trap” approach.
- Enhanced cross-border coordination so UK-based issuers can compete globally.
Next Steps & Consultation Timeline
The Bank of England’s consultation on the new regime is open until 10 February 2026. The final Code of Practice for systemic stablecoin issuers is expected later in 2026, at which point firms will need to substantially comply with new prudential and operational rules.
Crypto industry participants instruct that they will prepare formal submissions before the deadline and engage in bilateral consultations with policymakers to adjust the framework.
About [Your Organisation]
[Firstwealth] is a London-based digital-asset and financial-markets advisory firm. We specialise in regulatory strategy, blockchain infrastructure advisory and quant-driven analytics for institutional clients and fintech firms.
Title: Senior Analyst – Digital Assets & Regulatory Strategy
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