Coinbase criticizes UK stablecoin policy: “Holding limits will leave it behind in competition”
Summary
- Coinbase VP Gordon said the UK’s stablecoin regulation will determine London’s status as a financial hub.
- He warned that the UK’s stablecoin holding limits could prevent pound-denominated stablecoins from functioning as settlement infrastructure, leaving the UK behind in competition.
- Gordon said stablecoins are fully reserved and therefore less prone than banks to bank runs, though large-scale redemption events remain possible.
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US cryptocurrency exchange Coinbase has spoken out against the UK’s stablecoin policy.
According to The Block on the 4th (local time), Tom Duff Gordon, Coinbase’s Vice President for International Policy, attended a meeting of the UK House of Lords Financial Services Regulation Committee and said that “the UK’s stablecoin regulation will determine whether London can maintain its status as one of the world’s leading financial hubs over the next decade.”
Gordon highlighted the UK’s cap on stablecoin holdings. The UK has limited stablecoin holdings to £20,000 for individuals and £10 million for companies. He said that “if pound-denominated stablecoins cannot be held at meaningful scale, they cannot function as the settlement infrastructure for tokenized government bonds and bonds,” adding that “such caps risk preventing pound-denominated stablecoins from reaching the point at which they become useful.”
He also referred to stablecoins’ “bank-run risk.” Gordon said that “stablecoins could also face the possibility of large-scale redemption events similar to a bank run,” but added that “because stablecoins are fully reserved and have no maturity transformation, they are less likely than banks to experience a bank run.”
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul
