Techub News reports that a cross-party group of MPs in the UK has urged Chancellor of the Exchequer Rachel Reeves to oppose the Bank of England's proposal to impose a cap on stablecoin holdings in the country, stating that the bank's policy would undermine the government's efforts to position the UK as a leader in the digital asset space. In a letter to Reeves, members of the House of Lords, including CMC Markets Plc CEO Peter Cruddas, stated that the Bank of England's plan to limit the amount of stablecoins individuals can hold would not reduce risk but rather drive capital overseas. The group wrote: "We are deeply concerned that the UK is gradually moving towards a fragmented and restrictive approach that will hinder innovation, limit accessibility, and push activity overseas."
The Bank of England announced last month its proposed stablecoin regulations, stating that it will temporarily set a limit of £20,000 (approximately $26,350) on individual stablecoin holdings and a limit of £10 million for businesses. The bank also requires issuers of tokens pegged to the pound to hold at least 40% of the reserves backing the token as non-interest-bearing deposits at the central bank.