Britain moves to align crypto policy with the US, but Bank of England proposals to cap stablecoin holdings face industry pushback and competitiveness concerns.
UK and US discuss closer crypto cooperation
The UK is stepping up efforts to position itself as a hub for digital assets by seeking closer ties with the United States. According to the Financial Times, Chancellor Rachel Reeves met this week with US Treasury Secretary Scott Bessent to discuss aligning approaches on crypto regulation.
Together we are delivering investment and opportunity for both our countries.
— Rachel Reeves (@RachelReevesMP) September 16, 2025
It was a pleasure to welcome @SecScottBessent to Downing Street today. pic.twitter.com/rvI435Jz0O
Executives from Coinbase, Circle, Ripple, and major banks including Barclays and Citi joined the talks, which followed growing calls from industry advocacy groups for London to adopt a more open stance. Stablecoins featured heavily in the discussions, alongside digital securities sandboxes, testing environments that would allow blockchain applications in finance to be trialed under regulatory oversight.
Officials hope that alignment with Washington will both reassure investors and help attract fresh capital to the City.
Bank of England proposes stablecoin limits
At the same time, the Bank of England (BoE) is pushing proposals that industry leaders argue could undermine these ambitions. The central bank is considering capping systemic stablecoin holdings at between £10,000 and £20,000 ($13,600–$27,200) for individuals and £10 million ($13.6 million) for businesses, the FT reported.
BoE executive director Sasha Mills defended the approach, saying the limits would help contain risks from “sudden deposit withdrawals” that might otherwise destabilize commercial banks and credit provision. The discussion paper published with the proposals would also require systemic stablecoins to be fully backed by deposits at the BoE.
Industry Pushback
Crypto firms and payments representatives quickly criticized the plan. Coinbase’s vice president of international policy, Tom Duff Gordon, told the FT:
“Imposing caps on stablecoins is bad for UK savers, bad for the City and bad for sterling.”
Simon Jennings of the UK Cryptoasset Business Council argued enforcement would be “almost impossible,” since issuers lack visibility into user holdings.
Riccardo Tordera-Ricchi of The Payments Association said:
“There are no caps on cash, bank accounts or e-money, and stablecoins should be treated similarly.”
It is worth pointing out that the UK would be stricter than its global peers. In the US, lawmakers recently passed the GENIUS Act, establishing a federal regime for payment stablecoins focused on licensing and reserve requirements but with no ownership caps.
In Europe, the Markets in Crypto-Assets Regulation (MiCA) has taken effect with reserve and governance rules, again without limiting holdings.
The stakes are high
With the global stablecoin market worth around $288 billion, and projected by Coinbase to reach $1.2 trillion by 2028, industry figures warn that restrictive UK rules could drive business elsewhere.
Investor appetite is clear: a recent survey found 27% of UK adults would consider crypto for retirement savings, while one in five has already held digital assets. At the same time, 40% of investors reported their banks had blocked or delayed payments to crypto providers, underscoring persistent tension between traditional finance and the sector. Just almost a year ago, the UK government introduced a new Property Bill that would grant cryptocurrencies and non-fungible tokens (NFTs) formal recognition as personal property under English and Welsh law.
This bill was meant to create a new legal property category for “things” that includes digital assets like tokens, digital art, and carbon credits.
Challenge
The BoE has stressed its stablecoin proposals are still exploratory and will go to consultation later this year alongside the Financial Conduct Authority (FCA) and HM Treasury.
Meanwhile, the Treasury is signaling through US engagement that it wants to position the UK as a pro-innovation hub.
The challenge will be balancing financial stability with competitiveness. Whether the UK tilts toward tight control or a more open model could determine if London cements itself as a global crypto center or risks losing ground to the US and Europe.
Gunel Ismayilova
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