The Bank of England’s proposed stablecoin ownership limit is not working, says Crypto Group

The Financial Times (FT) reported on Monday that the cryptocurrency group is urging the Bank of England (BOE) to scrap proposals that limit the amounts that Stablecoins can own.

The group warned that the rules would leave the UK under more stringent surveillance than the US or the European Union.

According to the FT, BOE officials plan to charge individuals between £10,000 to £20,000 ($13,600-$27,200) and approximately £10 million ($13.6 million) of British pounds ($13,600-$27,200) in all systematic stubcoin companies, defined as tokens already used to pay in the UK.

Central banks argue that restrictions are necessary to prevent the leakage of deposits from banks that could undermine credit clauses and financial stability.

FT cited Sasha Mills, executive director of financial market infrastructure at BOE. This states that restrictions reduce risks from sudden deposit withdrawals and expansion of new systematic payment systems.

However, industry executives told FT that the plan was ineffective.

Tom Duff Gordon, Coinbase vice president of international policy, added: “Imposing caps on Stablecoins is bad for cities, bad for Sterling, and that other major jurisdictions do not impose such restrictions.

Simon Jennings of the UK’s CryptoAsset Business Council said enforcement would be near impossible without new systems such as digital IDs. Payments Association’s Riccardo Tordera-ricchi told FT that it would “make no sense” because there is no cap on cash or bank accounts.

The United States enacted the Genius Act in July. The law sets issuer licenses, reserves, and reimbursement standards, with no caps on individual holdings. The European Union is also pushing forward with the crypto deduction regulation (MICA) market. This is currently fully enabled across the block.

The Asset Reference and e-Money Token Stability Rules came into effect on June 30, 2024, followed by a broader provision of crypto assets and service providers on December 30, 2024.