Controversy Over Stablecoin Cap Proposal
Coinbase CEO Brian Armstrong recently expressed concern over the Bank of England's proposal to cap stablecoin holdings, warning that it could weaken the UK's position in the global digital economy.
The Bank previously suggested a $26,350 limit for individuals and $12.7 million for businesses, with a requirement to hold 40% of reserves in non-interest-bearing central bank accounts—an idea that has sparked widespread debate.
Potential Threats to Innovation and Competitiveness
Armstrong argued that the current regulatory trajectory could hinder, rather than support, financial innovation in the digital space.
- Limiting stablecoin holdings may reduce market participation and liquidity
- Reserve requirements could raise operational costs
- Overly strict regulation may push blockchain firms overseas
UK lawmakers have also warned that such measures could stifle adoption and shift activity to jurisdictions with more favorable regulatory environments.