House of Lords urges Bank of England to rethink strict GBP stablecoin caps and backing rules, warning of market harm

A House of Lords committee has urged the Bank of England to reconsider proposed stablecoin restrictions, highlighting proposed holding limits of £20,000 per individual and £10 million per business as measures that could impede adoption ^{[1] [2]}.

The committee expressed support for one‑to‑one reserve backing for GBP stablecoin issuers but questioned rules such as unremunerated backing assets and the proposed holding caps, warning these requirements risk making pound‑denominated stablecoins obsolete and undermining their usefulness for payments ^{[3] [4]}.

Lawmakers also urged regulators not to delay finalising stablecoin rules as international frameworks progress and asked HM Treasury to review risks tied to private unhosted wallets, saying a viable GBP stablecoin market could support faster, cheaper payments if appropriately regulated ^{[3] [5]}.

The report calls on the Bank of England to revise its approach to preserve market viability for GBP stablecoins and to align UK regulation with global developments ^{[1] [3]}.