The United Kingdom based on the cryptocurrency industry advocacy groups has called on the Bank of England not to continue plans to limit Stablecoin individual handling.
In a discussion in November 2023 PaperThe bank is floating the setting of individual caps on digital pounds between 10,000 British pounds ($ 13,558) and 20,000 pounds and requesting feedback to a possible lower limit of 5,000 pounds.
According to a Monday Monday on Monday ReportIndustry groups criticized the plan, saying it was difficult and expensive to implement and leave the UK caught behind other constituents.
Tom Duff Gordon, vice-president of Coinbase international policy, has been reported to have said the limitations will be bad for UK savers and the pound itself. “There is no other basic jurisdiction that is considered necessary to impose caps,” he said.
Stablecoin limits “Don’t work in practice”
Simon Jennings, Executive Director of the UK Cryptoasset Business Council (UKCBC), told FT that “the limits don’t work in training.”
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He added that “the givers do not see who holds their tokens at any time, so implementing the caps will require a costly, complex new system.”
Last week, Jennings told Cointelegraph that UKCBC would like to “establish a transatlantic corridor for payments to stablecoins“Between the UK and the United States. The Bank of England’s plan will limit the effectiveness of such a system.
UK regulators are afraid that stablecoins can ensure traditional financial ecosystems. In early April, the UK Financial Policy Committee Recognized that Stablecoins and Crypto markets have expanded significantly During the last year, the drawing of increased attention of regulation.
The committee noted at the time “even with the appropriate regulation, the greater use of stablecoins denomination with foreign currencies could have made some economies vulnerable to replacing money.” Similar concerns are also raised in other countries.
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Stablecoin -powered bank runs and replaces money
Earlier this month, Christine Lagarde, president of the European Central Bank (ECB), called for policy manufacturers to address gaps in Stablecoin regulation. Among other comments, he sounds the alarm that US stablecoin policies “may result not only with further losses of fees and data, but also in Euro deposits were moved to the United States And with a further strengthening of the dollar’s role in cross-border payments. “
Banks are also afraid that they may not compete with the convenience of stablecoins if they are allowed to pay yields to their holders. Citi’s future of financial head Ronit Ghose warns late August that Payment of interest in stablecoin deposits can spark a wave of bank flowers Similar to the Boom of the Currency Market Fund in the 1980s.
Some in the crypto industry have suggested that banks have to take their game to compete. “If local banks are concerned about competition from Stablecoins, they should pay more interest in deposits,” Bitwise’s investment leader Matt Hougan, recently said.
George Osborne, the former UK Chancellor became a crypto lobbyist, recently said that the UK is falling behind the digital asset marketespecially in the area of Stablecoins.
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