Stablecoins Get Backing From Cross-Party UK Lawmakers Urging Pro-Innovation Rules

A cross-party coalition of UK lawmakers sent a letter to Chancellor Rachel Reeves expressing concern that the Bank of England's proposed stablecoin framework could stifle innovation and harm the City of London's standing as a financial hub. The lawmakers argue that stablecoins, which are rapidly growing in transaction volume, require a forward-looking regulatory framework to attract investment. They specifically warned that the Bank of England's draft rules—which restrict wholesale use, ban interest on reserves, and cap holdings at GBP 20,000—risk making pound-backed stablecoins unattractive. This, they fear, would cause a flight of on-chain activity toward dollar-based alternatives like USDC and USDT, creating a two-tier market. The group called for intervention to deliver on the UK's ambition to be a world-leading destination for digital assets.

(Source：CoinDesk)