Bank of England Proposes Stablecoin Holding Caps for Individuals and Businesses

The Bank of England (BoE) proposes limiting stablecoin holdings to £10,000-£20,000 for individuals and £10 million for businesses. This aims to prevent bank deposit outflows, as a shift from bank deposits to stablecoins could reduce banks' lending capacities.

If approved, the limits might alter how stablecoins are used, potentially hindering innovation and mainstream adoption in the UK.
The UK ranks 11th on the 2025 Global Crypto Adoption Index, implying significant impacts from these regulations.
Tom Duff Gordon from Coinbase criticized the proposal, noting no other major jurisdiction has similar caps.
There's concern over reduced privacy due to necessary monitoring systems like digital IDs.
The BoE suggests this could be temporary, but it creates uncertainty for businesses with long-term plans.
The global stablecoin market is substantial, with a market cap of $302 billion, indicating widespread effects if UK limitations are implemented.

The proposal highlights the tension between financial stability and innovation, affecting stakeholders in the cryptocurrency space significantly.