London — As digital finance accelerates, the UK currently stands at a critical crossroads for stablecoin regulation. During a significant hearing by the House of Lords Financial Services Regulatory Committee, Tom Duff Gordon, Vice President of International Policy at Coinbase, strongly urged the government to eliminate the central bank's proposed holding limit for stablecoin enterprises. He believes that implementing a limit of £10 million per institution would severely hinder London’s competitiveness in the global digital finance landscape.
Currently, the Bank of England has proposed limits on the single stablecoin holdings of legal entities in its consultation document regarding systemic stablecoins. However, industry insiders generally believe this threshold is far below actual demand. As a major global financial center, London sees large institutions conducting daily transaction settlements often reaching billions of pounds, and a £10 million cap represents less than one-thousandth of its daily flow, making it inadequate to support enterprise-level applications.
Globally, major financial entities are constructing regulatory frameworks for digital assets through various paths. Singapore introduced a comprehensive Payment Services Act back in 2020; the EU officially passed the Markets in Crypto-Assets Regulation (MiCA) in 2023; and the UAE’s Abu Dhabi and Dubai have also established open virtual asset licensing systems. These regions generally do not impose rigid holding limits but instead focus on the qualifications of issuers, transparency of reserves, and risk management mechanisms.
Japan allows approved stablecoins to be held without limits by qualified investors; Switzerland permits stablecoins to be deeply integrated into its banking system; while the US, although still progressing state by state, is gradually forming a federal-level guiding framework. In contrast, if the UK insists on setting mechanical limits, it may miss the opportunity to attract global crypto innovation capital.
Dr. Sarah Chen, a fintech researcher at Cambridge University, pointed out, “Truly effective regulation should be based on the real operational logic of the market, rather than simple limits.” Her research indicates that a risk control model centered on issuer governance structures and reserve transparency is more effective in preventing systemic risks than setting vague monetary caps, while also leaving room for technological innovation. In the context of the rapidly restructuring global financial landscape, if the UK wishes to maintain its status as an international financial center, it must demonstrate foresight and flexibility in its regulatory design.