UK coalition of lawmakers urges stablecoin innovation…"Regulatory easing needed"

Calls have emerged in the UK to ease digital asset regulations.

On the 12th (Korean time), according to virtual asset (cryptocurrency) specialist media CoinDesk, a coalition of members of the House of Commons and the House of Lords sent an open letter to Rachel Reeves, the UK Chancellor of the Exchequer, urging her to ease regulations related to stablecoins (virtual assets whose value is pegged to fiat currency) in the UK. They argued that for the UK to maintain its position as a global fintech leader and attract international investment, the Bank of England (BOE)'s stablecoin regulatory framework needs to be reviewed.

This follows the BOE's earlier publication of a draft framework that limits individual investors' stablecoin holdings to 20,000 pounds and corporate stablecoin holdings to 10,000,000 pounds.

Specifically, they said, "Stablecoins had transaction volumes of 27.6 trillion dollars in 2024, almost 8% more than the combined transaction volumes of Visa and MasterCard," and "stablecoins are reshaping financial infrastructure." They also emphasized that stablecoins, as digital assets linked to traditional currencies, play an important role in innovating financial transactions, reducing costs, and promoting financial inclusion.

The coalition specifically expressed concern that excessive regulation of domestic-currency stablecoins could lead to a decline in the pound's influence. In the letter they explained, "If the BOE's proposed draft regulations are introduced, pound-denominated stablecoins would become unattractive, and investors are likely to move to dollar-denominated alternative assets (USDC, USDT, etc.)," adding, "pound-denominated digital assets could lose market leadership, resulting in a split into two markets in which most transactions are conducted in dollars."