House of Lords Warns BoE Stablecoin Rules Could Limit Growth

• UK lawmakers warn stablecoin limits may slow growth of pound-backed digital tokens.
• Committee questions 40% reserve deposit rule over concerns about issuer viability.
• Proposed holding caps and reward restrictions face scrutiny before rules are finalized.

The United Kingdom’s effort to establish a regulatory framework for stablecoins has entered a new phase after a House of Lords committee warned that several proposed restrictions could limit the issuance of pound-sterling-backed digital tokens. 

The concerns were outlined in a report published by the House of Lords Financial Services Regulation Committee, which reviewed proposals from the Bank of England (BoE) and the Financial Conduct Authority (FCA). The committee said a clear regulatory structure remains necessary but cautioned that some measures could discourage participation in a sector that is still in its …

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