Cross-party U.K. lawmakers have urged Chancellor Rachel Reeves to intervene in the country’s stablecoin policymaking, warning that the Bank of England’s current proposals could dampen innovation, push capital abroad and weaken London’s role as a global financial hub.
In a letter dated Dec. 11, 2025, addressed to the Chancellor, the group cautioned that restrictive rules around stablecoins risk putting the U.K. at a disadvantage as digital assets become increasingly central to financial infrastructure. Signatories include senior MPs and peers such as Sir Gavin Williamson, Viscount Camrose and Baroness Verma.
The lawmakers said stablecoins — digital tokens typically pegged to fiat currencies — are rapidly emerging as a cornerstone of the digital economy. They argued the technology is reshaping payments and settlements by lowering costs, accelerating transaction times and expanding financial inclusion.
“Stablecoins are reshaping financial infrastructure,” the group wrote, citing figures showing transaction volumes reached $27.6 trillion in 2024, nearly 8% higher than the combined activity of Visa and Mastercard. Citibank projects that volume could rise above $100 trillion by 2030, the letter noted.
Despite that growth trajectory, the lawmakers warned that the Bank of England’s draft framework — which limits stablecoin use in wholesale markets, bans interest on reserves and caps individual holdings at £20,000 — risks leaving the U.K. sidelined during the next wave of financial innovation.
Those constraints could render pound-backed stablecoins commercially unattractive, they argued, steering users and developers toward dollar-pegged alternatives such as USDC and USDT, which sit largely beyond the reach of U.K. regulators.
“The likely outcome would be a migration from pound-backed digital assets to dollar-based ones, creating a two-tier market in which most on-chain activity is denominated and settled in U.S. dollars,” the lawmakers warned.
The appeal comes as the United States moves forward with legislation such as the GENIUS Act to provide regulatory clarity for digital assets, heightening concerns that hesitation in the U.K. could erode London’s long-standing leadership in fintech and capital markets.
The letter concludes by calling for a forward-looking, innovation-friendly stablecoin regime that would attract international investment, support high-value fintech growth and reinforce the U.K.’s position as a global center for financial innovation.
“We welcome your ambition to make the UK a world-leading destination for digital assets,” the group wrote. “Now is the time to act.”
