UK MPs warn Bank of England stablecoin plans could drive innovation offshore

A cross-party group of UK parliamentarians, including Sir Gavin Williamson and Lord Hart, sent an open letter to Chancellor Rachel Reeves urging intervention in the Bank of England's proposed stablecoin regulation. They warn that the Bank's plans—which include prohibiting interest on reserves and imposing restrictive holding caps—could make the UK a "global outlier" by barring most wholesale stablecoin use outside a limited sandbox. The signatories argue this restrictive approach will deter adoption, weaken London's global role, and drive activity into dollar-denominated stablecoins like USDC and USDT. Industry leaders echoed this concern, stating the proposed framework treats stablecoins as experimental rather than essential settlement infrastructure, suggesting that structural inefficiencies will cause capital and innovation to migrate to jurisdictions with more flexible rules, such as the EU under MiCA or the US.

(Source：Cointelegraph)