A group of U.K. lawmakers from across the political spectrum has called on Chancellor Rachel Reeves to step in on stablecoin regulation, warning that proposed rules from the Bank of England could stifle innovation, drive capital overseas and weaken London’s position as a global financial center.
In a letter dated Dec. 11, 2025, addressed to the Chancellor, the lawmakers said the U.K. risks falling behind in digital finance if its regulatory approach to stablecoins becomes overly restrictive. The letter was signed by senior MPs and peers including Sir Gavin Williamson, Viscount Camrose and Baroness Verma.
The group argued that stablecoins — digital assets typically pegged to fiat currencies — are becoming an essential part of the global financial system. They said the technology is reshaping payments and settlement infrastructure by reducing costs, speeding up transactions and expanding financial access.
“Stablecoins are reshaping financial infrastructure,” the lawmakers wrote, pointing to data showing transaction volumes reached $27.6 trillion in 2024, nearly 8% more than the combined volume processed by Visa and Mastercard. Citibank estimates that stablecoin transactions could exceed $100 trillion by 2030.
Despite this rapid growth, the lawmakers warned that the Bank of England’s draft framework — which restricts stablecoin use in wholesale markets, prohibits interest on reserves and caps individual holdings at £20,000 — could leave Britain on the sidelines of the next phase of financial innovation.
They argued such constraints risk making pound-backed stablecoins uncompetitive, encouraging users to migrate toward dollar-denominated alternatives such as USDC and USDT, which largely fall outside U.K. regulatory oversight.
“The result would be a shift from pound-backed digital assets to dollar-based ones, creating a two-tier system in which most on-chain activity is denominated and settled in U.S. dollars,” the group warned.
The intervention comes as the United States pushes ahead with legislation such as the GENIUS Act to bring regulatory clarity to digital assets, raising concerns that hesitation in the U.K. could erode London’s long-standing leadership in fintech and capital markets.
The letter concludes by urging the government to adopt a forward-looking stablecoin framework that attracts international investment, supports high-value fintech growth and reinforces the U.K.’s position as a global hub for financial innovation.
“We welcome your commitment to making the UK a world-leading destination for digital assets,” the lawmakers wrote. “Now is the time to deliver on that ambition.”
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