A U.K. House of Lords committee has recommended that the Bank of England (BOE) reconsider its proposed limits on consumer stablecoin holdings. The cross-party Financial Services Regulation Committee released a report titled 'Stablecoins: waiting for regulation' on Wednesday, advising against pre-emptive holding limits of £20,000 per coin for individuals and £10 million for businesses. The committee argued that given the early stage of the GBP stablecoin market, the BOE should monitor growth and impose limits only if financial stability risks clearly warrant it. The report also questioned the requirement for stablecoin issuers to hold at least 40% of backing assets in non-interest-bearing central bank deposits, stating this could significantly impact business viability. The BOE has indicated a willingness to ease restrictions, with Deputy Governor Sarah Breeden admitting they were 'overly conservative' and that the bank is exploring alternative ways to manage risks. This development comes amid broader efforts to establish a regulatory framework for stablecoins in the U.K., balancing innovation with financial stability.

Key facts

• House of Lords committee advises BOE against pre-emptive stablecoin holding limits.
• Limits proposed: £20,000 for individuals, £10 million for businesses.
• Report questions 40% backing asset requirement in non-interest-bearing central bank deposits.
• BOE Deputy Governor admits proposed restrictions were 'overly conservative'.
• Committee recommends monitoring market growth before imposing limits.