Stablecoins Get Backing From Cross-Party UK Lawmakers Urging Pro-Innovation Rules
Key Takeaways
- A group of lawmakers from the UK has urged Chancellor of the Exchequer Rachel Reeves to revisit the Bank of England’s stance on stablecoins to promote innovation and prevent capital outflow to other countries.
- They noted that stablecoin transactions reached $27.6 trillion in 2024, which surpassed the combined transaction volumes of Visa and Mastercard by nearly 8%.
- The Bank of England’s draft framework restricts the use of stablecoins in wholesale markets, bans collecting interest on reserves, and caps stablecoin holdings at GBP 20,000.
- They argued that such limits would make GBP-backed stablecoins unattractive in the wider market.
- The UK lawmakers who appealed to reconsider the country’s decisions are apprehensive that, with the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, the US will override the UK’s dominance in the financial technology sector.
A group of lawmakers from the UK has called for proactive law-making to support innovation in stablecoins to make the UK a leader in financial technology and attract international investment. Reports show that the group has urged Chancellor of the Exchequer Rachel Reeves to revisit the Bank of England’s stance on stablecoins to promote innovation and prevent capital outflow to other countries.
In a letter dated December 11, 2025, and signed by prominent legislators such as Sir Gavin Williamson, Viscount Camrose, and Baroness Verma, the coalition of lawmakers underscored that stablecoins are soon becoming the central point of the digital economy; their peg with stable fiat currencies makes them serve as a link between traditional finance and decentralized finance. Therefore, the current policies ignoring this asset class may potentially affect the UK’s economic future, they warned.
Stablecoins are Promoting Financial Inclusion, the Letter Continues
The letter sent by the group of lawmakers further stressed the role that stablecoins play in reshaping financial transactions. They promote financial inclusion by lowering the transaction costs and accelerating settlements. They noted that stablecoin transactions reached $27.6 trillion in 2024, which surpassed the combined transaction volumes of Visa and Mastercard by nearly 8%. The letter further quotes Citibank’s predictions that this figure could exceed $100 trillion by 2030.
The Bank of England’s draft framework restricts the use of stablecoins in wholesale markets, bans collecting interest on reserves, and caps stablecoin holding at GBP 20,000. Such restrictions will sideline the country in the field of ongoing innovations in digital financial services.
They argued that such limits would make GBP-backed stablecoins unattractive in the wider market. As a result, investors will flock to USD-based stablecoins, thus affecting the value of pound-backed digital assets.
The US’s GENIUS Act and Its Impact on the UK Lawmakers’ Decisions
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act was made into law after the US President Trump signed the act. The act gave a regulatory framework for stablecoins in the US. The UK lawmakers who appealed to reconsider the country’s decisions are apprehensive that with this law, the US will override the UK’s dominance in the financial technology sector. The indecision of the concerned authorities will result in capital erosion to other countries, especially the US.
The Letter Insists on Prompt Action
The letter concludes by stating that the concerned legal authorities should make a forward-looking regulatory framework, which will promote international investment in pound-backed stablecoins. It will reinforce growth in the country’s fintech sector and reinforce the UK’s stature as a global hub for fintech services. It will also attract international investment to the country, the letter concluded.
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