A cross-party coalition of U.K. lawmakers is urging Chancellor Rachel Reeves to step in and reshape the Bank of England’s proposed stablecoin framework, warning that the current approach threatens to undermine Britain’s fintech leadership and drive capital out of the country. In a joint letter dated Dec. 11, 2025, MPs and peers, including Sir Gavin Williamson, Viscount Camrose, and Baroness Verma, stressed that stablecoins are becoming a cornerstone of global finance and deserve regulatory treatment that encourages growth, not limits it.
Lawmakers highlighted how dramatically the stablecoin sector has expanded, noting that stablecoin transaction volume hit $27.6 trillion in 2024, exceeding Visa and Mastercard’s combined activity by nearly 8%. Citibank expects that number to soar to over $100 trillion by 2030, a sign that stablecoins are moving towards the essential infrastructure for payments, remittances, settlements, and financial inclusion.
Against that backdrop, the group warned that the Bank of England’s draft rules risk leaving the U.K. “on the sidelines” of the next major financial shift. Instead of enabling innovation, they fear the proposals may create barriers that push developers and liquidity providers toward more welcoming jurisdictions.
The Bank of England’s initial framework includes a ban on interest for stablecoin reserves, restrictions on wholesale use, and a GBP 20,000 cap on consumer holdings. According to lawmakers, these limits could make pound-backed stablecoins fundamentally uncompetitive, pushing users toward dollar-based alternatives like USDC and USDT, which already dominate global on-chain activity. They warn this could result in a two-tier digital economy, where most blockchain transactions occurring in the U.K. end up denominated in U.S. dollars, weakening both the pound’s digital presence and Britain’s regulatory influence.
Moreover, the U.S. is speeding ahead with its GENIUS Act, providing regulatory clarity and attracting global stablecoin issuers and fintech builders. Lawmakers fear that unless the U.K. shifts to a more forward-looking approach, London’s long-held status as a global financial and fintech hub could erode.
The letter closes with an intent that the U.K. must adopt stablecoin regulations that attract international investment, support high-value fintech growth, and reinforce its position as a global innovation leader. “Now is the time to deliver on this ambition,” the lawmakers wrote, calling for immediate intervention to ensure the U.K. remains competitive in the digital asset economy.
Stablecoins are digital currencies pegged to stable assets like the U.S. dollar. They are crucial for fast, cheap payments and are becoming a core part of global financial infrastructure, processing trillions in transactions annually.
Proposed UK rules, like a £20,000 holding cap and no interest on reserves, may make pound stablecoins uncompetitive. This could drive innovation and capital to other countries, weakening the pound’s role in the digital economy.
A cross-party coalition warns the current approach risks Britain’s fintech leadership, may cause capital flight to jurisdictions like the U.S., and could leave the UK sidelined in the next major shift in finance.
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