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The United Kingdom’s minority party Reform has formally rejected the Bank of England’s proposal to cap stablecoin holdings and its broader plan to introduce a central bank digital currency (CBDC). In a Sept. 18 statement on X, the party’s head of policy, Zia Yusuf, alongside party figurehead Nigel Farage, warned that the measures would damage Britain’s competitiveness in the global digital economy.
Last week, the Bank of England proposed restricting stablecoin exposure for individuals and businesses. Under the draft proposal, citizens would be limited to holding between £10,000 and £20,000 in systemic stablecoins, while businesses would face a maximum cap of £10 million. The regulator argues that the plan aims to reduce financial risks as digital assets become more mainstream.
However, the Reform party leaders framed the proposal as an attack on innovation rather than a safeguard. They argued that limiting the use of stablecoins risks choking off demand for British government debt while strengthening the position of global rivals. According to the statement, dollar–pegged stablecoins like USDC and USDT funnel significant liquidity into US Treasuries, reinforcing the dollar’s dominance in digital finance. By contrast, the UK lacks any mechanism equivalent to a backstop demand for gilts.
Yusuf wrote:
“Now ask yourself: where is the British equivalent? Where is the pound-backed stablecoin with deep liquidity, one that global markets can trust, one that channels fresh demand into UK gilts? It doesn’t exist, because policymakers here have been openly hostile to innovators. Instead of building the future, Britain’s regulators have smothered it.” Considering this, Yusuf argued that “stablecoins are not a danger to financial stability.”
However, the Reform party leaders framed the proposal as an attack on innovation rather than a safeguard. They argued that limiting the use of stablecoins risks choking off demand for British government debt while strengthening the position of global rivals. According to the statement, dollar–pegged stablecoins like USDC and USDT funnel significant liquidity into US Treasuries, reinforcing the dollar’s dominance in digital finance. By contrast, the UK lacks any mechanism equivalent to a backstop demand for gilts.
Yusuf wrote:
“Now ask yourself: where is the British equivalent? Where is the pound-backed stablecoin with deep liquidity, one that global markets can trust, one that channels fresh demand into UK gilts? It doesn’t exist, because policymakers here have been openly hostile to innovators. Instead of building the future, Britain’s regulators have smothered it.” Considering this, Yusuf argued that “stablecoins are not a danger to financial stability.”
Instead, he described the assets as: “[A] bridge between the digital world and the traditional banking system. A bridge between entrepreneurs and customers, between investors and opportunity. They are simply new wrappers around money – safer, faster, programmable money that can settle instantly across borders without costly intermediaries.”
No to CBDC. The Reform Party has also fought hard against the creation of a digital pound. According to the party, a state-backed CBDC would hand the Bank of England “unprecedented control” over financial activity, stifling competition and discouraging private-sector innovation. Instead, they advocate for regulated, privately issued stablecoins that could drive growth without giving government entities direct control over citizens’ wallets. To support that approach, the party said it would advance its proposed Crypto Assets and Digital Finance Bill to establish a transparent and proportionate regulatory framework.
By creating rules that balance consumer protection with market freedom, Reform argues the UK could emerge as a leader in the global stablecoin race and generate new employment opportunities in fintech and digital finance. The stance marks another step in the party’s embrace of crypto. Earlier this year, it became one of the first political groups in the UK to accept donations in Bitcoin and other digital assets.
By creating rules that balance consumer protection with market freedom, Reform argues the UK could emerge as a leader in the global stablecoin race and generate new employment opportunities in fintech and digital finance. The stance marks another step in the party’s embrace of crypto. Earlier this year, it became one of the first political groups in the UK to accept donations in Bitcoin and other digital assets.
