The defense groups of the cryptocurrency industry based in the United Kingdom have called on the Bank of England not to carry out its plans to limit individual stable participations.
In a discussion document in November 2023, the bank floated by fixing individual ceilings on digital books between 10,000 British pounds and 20,000 pounds and asked for comments on a possible limit of 5,000 pounds.
According to a Monday Financial Times report, industry groups have criticized the plan, saying that it would be difficult and expensive to implement and could leave the United Kingdom in the back of other jurisdictions.
Tom Duff Gordon, vice-president of international policy in Coinbase, would have said that the limits would be bad for British savers and the book itself. “No other major jurisdiction deemed necessary to impose ceilings,” he said.
Stablecoin limits “Do not work in practice”
Simon Jennings, executive director of the UK Cryptoasset Business Council (UKCBC), told the FT that “the limits simply do not work in practice”.
In relation: Groups of the cryptographic industry by the bankers to rewrite the law on engineering
He added that “the transmitters do not have the sight of who holds their tokens at any time, so the application of the ceilings would require an expensive and complex new system.”
Last week, Jennings told Cintelegraph that the UKCBC would like to “establish a transatlantic corridor for stable-coin payments” between the United Kingdom and the United States. The plan of the Bank of England would limit the effectiveness of such a system.
British regulators fear that stablecoins will destabilize the traditional financial ecosystem. In early April, the British financial policy committee recognized that the brands of stablescoins and cryptography have developed considerably in the past year, attracting increased regulatory attention.
The Committee noted at the time that “even with appropriate regulations, greater use of the stabls denominated in foreign currencies could make certain savings vulnerable to the substitution of currencies”. Similar concerns have also been raised in other countries.
In relation: The governor of the Bank of England warns against the private program of the stables
Banks powered by stablescointes and substitution of currencies
Earlier this month, Christine Lagarde, president of the European Central Bank (ECB), called on decision-makers to fill the gaps in the regulation of stablescoin. Among other remarks, it sounded the alarm that American Stablecoin policies “could potentially lead not only to loss of costs and data, but also in the deposits in euros transferred to the United States and a new strengthening of the role of the dollar in cross-border payments.”
Banks are also afraid of not being able to compete with the convenience of stablecoins if they are allowed to pay the yields to their holders. The future of Citi, the finance chief, Ronit Ghose, warned at the end of August that the payment of interests on the stablecoin deposits could trigger a wave of bank outings similar to the boom of the 1980s monetary market.
Some in the cryptography industry, on the other hand, suggest that banks should intensify their game to compete. “If local banks are concerned about competition from Stablecoins, they should pay more interest in deposits,” said Bitwise investment chief Matt Hougan recently.
George Osborne, the former British chancellor who became cryptographic lobbyist, recently said that the United Kingdom was delaying in the digital asset market, especially in the field of Stablecoins.
Review: Stablecoins in Japan and China, India reflects on the cryptography of changes: Asia Express