British lawmakers are urging the Chancellor of the Exchequer to question the Bank of England's stablecoin program.
PANews reported on December 12th, citing Bloomberg, that a cross-party group of British MPs urged Chancellor of the Exchequer Rachel Reeves to oppose the Bank of England's proposal to cap stablecoin holdings in the country, arguing that the policy would undermine the government's efforts to position the UK as a leader in the digital asset space. In a letter to Reeves, MPs, including Peter Cruddas, CEO of trading platform CMC Markets Plc, stated that the Bank of England's plan to limit the amount of stablecoins an individual can hold would not reduce risk but would instead encourage capital outflows overseas. The group wrote: "We are deeply concerned that the UK is moving towards a fragmented and restrictive approach that will hinder innovation, limit adoption, and push activity overseas."
Last month, the Bank of England unveiled its proposed stablecoin rules, stating that it would temporarily cap individual stablecoin holdings at £20,000 (approximately $26,350) and corporate holdings at £10 million. The bank also requires issuers of pound-pegged tokens to deposit at least 40% of their reserves backing the token with the central bank as interest-free deposits. These proposals have drawn criticism from cryptocurrency companies, who argue that they are too restrictive.
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