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>>Controversy erupts over UK stablecoin rules as Coinbase CEO cautions that innovation faces a crisis.

Controversy erupts over UK stablecoin rules as Coinbase CEO cautions that innovation faces a crisis.

crypthub

about 3 hours ago

Regulatory Concerns

Coinbase CEO Brian Armstrong warned that the UK’s proposed stablecoin limits could erode the country’s status as a digital‑finance hub. He argues that caps on holdings for individuals and businesses, together with strict issuer requirements, may drive innovators to friendlier jurisdictions. Armstrong stresses that maintaining the UK’s historical financial leadership demands embracing, not restricting, new technology.

Bank of England Framework

The Bank of England’s draft rules, based on its 2021 “New Forms of Digital Money” consultation, aim to protect stability while fostering adoption. Key provisions include holding caps, elevated capital standards, operational constraints, and mandated governance structures for stablecoin issuers. Critics say the measures are disproportionate compared with the EU’s MiCA regime, which offers a more balanced, innovation‑friendly approach.

Economic and Global Impact

Analysts link restrictive policies to a 34% drop in UK crypto venture capital in 2024, while rivals such as Germany and Singapore see growth. Tight rules could limit user access, curb fintech employment, and push firms toward markets with lighter regulation. The outcome of these proposals will signal whether the UK can compete in the rapidly evolving global digital economy.