Overview
- A cross‑party group from both Houses sent a formal letter urging Chancellor Rachel Reeves to intervene on the Bank of England’s draft regime for sterling stablecoins.
- The consultation proposes temporary holding caps of £20,000 per individual and about £10 million for most businesses, with possible exemptions for larger firms.
- Issuers would be limited to holding up to 60% of reserves in short‑term UK government debt, with roughly 40% kept as unremunerated deposits at the Bank of England.
- Critics say the package, including restrictions on wholesale use outside a tightly controlled sandbox, would render pound‑pegged tokens uncompetitive versus dollar stablecoins such as USDC and USDT.
- The Bank of England says the measures aim to safeguard access to credit during the transition to digital money and could be revisited, while the rules target systemic sterling tokens and not currently available coins regulated by the FCA.