Coinbase CEO warns UK stablecoin caps threaten finance hub status

Coinbase Chief Executive Brian Armstrong has warned that proposed stablecoin restrictions in the United Kingdom could undermine the country’s competitiveness as a global financial center, as debates over digital-asset regulation intensify across major economies.

Armstrong’s comments come as policymakers in London, Washington, and elsewhere weigh how to regulate stablecoins — cryptocurrencies designed to track the value of fiat currencies — while balancing financial stability and innovation.

At the same time, the exchange is navigating regulatory battles in the United States that could reshape a key source of revenue.

UK rules and competitiveness concerns

Armstrong criticized draft measures from the Bank of England that would limit stablecoin usage and impose reserve requirements on issuers.

"Stablecoin rules in the UK are being finalized, and are at risk of preventing the UK from being globally competitive in the digital economy," Armstrong wrote Tuesday on X. "The current direction of the rules does the opposite, and will act as an innovation blocker."

The proposals would cap individual holdings at $26,350 (£20,000) and business holdings at $12.7 million (£10 million), while requiring 40% of reserves to be held in non-interest-bearing central bank accounts. British lawmakers have warned the approach could “deter innovation, limit adoption, and push activity overseas.”

Armstrong’s post supported a petition organized by Stand With Crypto UK, a Coinbase-seeded advocacy group that has collected more than 80,000 signatures ahead of a March 3 deadline.

The petition calls on the government to create a pro-innovation regulatory framework and appoint a blockchain and crypto czar.

Under parliamentary rules, petitions surpassing 100,000 signatures may be considered for debate.

Clearpool Chief Operating Officer Steven Wu said in a Decrypt report that the debate goes beyond one company’s financial interests, noting the issue is “broader than one company’s revenue,” and the real question is “whether regulation focuses on managing risk properly, rather than limiting scale.”

Stablecoins and Coinbase’s revenue

Stablecoins have become a growing financial driver for Coinbase.

The company reported $1.35 billion in stablecoin revenue in 2025, up from $911 million the previous year. In the fourth quarter alone, stablecoins generated $364 million in revenue during a period when Coinbase posted a net loss of $667 million on $1.78 billion in total revenue.

Bloomberg Intelligence estimates revenue could increase two- to sevenfold under the US GENIUS Act, which created a federal framework for stablecoins and allows firms to offer holders yield on deposits.

Analysts say strict limits on holdings could affect institutional participation.

If projections materialize, stablecoins could become “core financial infrastructure, not a niche crypto product,” and caps may “limit the UK’s ability to capture meaningful liquidity and institutional participation", Wu added.

US regulatory battles and policy debate

The policy discussion extends to Washington, where lawmakers are considering additional legislation.

Banking groups have pushed to restrict yield-bearing stablecoins, arguing they could draw deposits away from traditional banks.

The proposed CLARITY Act includes limits that would affect exchanges such as Coinbase and threaten its revenue-sharing arrangement with Circle, issuer of the USDC stablecoin.

Armstrong withdrew support for the bill shortly before a Senate Banking Committee markup, calling the draft “materially worse than the current status quo” and stating he would “rather have no bill than a bad bill.”

Despite disagreements, the administration continues discussions with industry representatives and banking groups to address stablecoin yield policies.

The outcome could determine whether stablecoins remain a specialized crypto tool or evolve into a foundational component of global financial infrastructure.

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