A cross-party group of U.K. lawmakers has urged Chancellor Rachel Reeves to ensure that Britain’s stablecoin regulatory framework fosters innovation and retains capital, expressing concerns that the Bank of England’s current proposals could diminish the attractiveness of the City of London as a global financial center.
In a letter dated Dec. 11, 2025, addressed to the Chancellor and signed by prominent MPs and peers including Sir Gavin Williamson, Viscount Camrose, and Baroness Verma, the lawmakers highlighted that stablecoins, or digital tokens pegged to traditional fiat currencies, are increasingly becoming essential to the digital economy.
They stated that these tokens are transforming financial transactions by lowering costs, speeding up settlements, and enhancing financial inclusion.
“Stablecoins are transforming financial infrastructure,” the lawmakers noted, pointing out that transactions reached $27.6 trillion in 2024, exceeding the combined activity on Visa and Mastercard by nearly 8%. Citibank projects this figure could surpass $100 trillion by 2030.
However, they expressed concern that the Bank of England’s draft framework, which limits the use of stablecoins in wholesale markets, prohibits interest on reserves, and caps holdings at GBP 20,000, could leave the country behind in the upcoming wave of financial innovation.
Such restrictions could render pound-backed stablecoins “unattractive,” steering investors toward dollar-pegged alternatives like USDC and USDT, which fall outside U.K. regulatory jurisdiction.
“The result would be a migration from pound-backed digital assets to dollar-based ones, leading to a two-tier market where most on-chain activity is denominated and settled in U.S. dollars,” the lawmakers cautioned.
This intervention comes as the U.S. actively pushes forward with its GENIUS Act to provide regulatory clarity for digital assets, raising worries that London’s previous dominance in fintech and capital markets may be jeopardized by inaction at home.
The letter concluded by advocating for a forward-thinking stablecoin framework that would secure international investment, encourage high-value fintech growth, and strengthen the U.K.’s status as a global innovation hub.
secure international investment, support high-value fintech growth, and reinforce
“We appreciate your commitment to ‘making the UK a world-leading destination for digital assets.’ Now is the moment to fulfill this ambition. We urge you to take action,” the letter stated.
Read: IMF Flags Stablecoins as Source of Risk to Emerging Markets, Experts Say We Aren’t There Yet
