The Bank of England (BoE) plans to restrict systemic stablecoin holdings, according to the Financial Times.
In response, cryptocurrency exchange Coinbase, alongside UK trade groups, told the FT that the proposed caps would be unworkable.
The BoE would limit individuals to between £10,000 and £20,000 ($13,600–$27,200) and businesses to around £10 million ($13.6 million), according to the FT.
The bank has argued that the restrictions are necessary to prevent deposit outflows from banks, which could weaken credit provision and financial stability.
The crypto-native industry has largely responded negatively, raising concerns about the UK’s global competitiveness.
Tom Duff Gordon, Coinbase’s vice president of international policy, said “imposing caps on stablecoins is bad for U.K. savers, bad for the City and bad for sterling,” adding that no other major jurisdiction has imposed such limits.
Many other individuals active in the decentralised market share a similar view. Riccardo Tordera-Ricchi of The Payments Association told the FT that limits “make no sense” because there are no caps on cash or bank accounts.
The FT highlighted comments from Sasha Mills, the BoE’s executive director for financial market infrastructure, who said the limits would help mitigate risks from sudden deposit withdrawals and the scaling of new systemic payment systems.
