Bank of England faces calls from UK lawmakers to ease stablecoin plans

On June 3, 2026, a cross-party House of Lords Economic Affairs Committee delivered a pointed critique to the Bank of England, urging a significant recalibration of its proposed stablecoin regulations. Lawmakers warned that the central bank's stringent approach, particularly concerning capital requirements and "onshoring" rules, risks suffocating the nascent sterling-backed stablecoin market and undermining the UK's ambition to become a global cryptoasset hub. This intervention highlights a growing ideological rift between financial stability and innovation-driven policy. The Bank of England, alongside the Financial Conduct Authority (FCA), has consistently prioritized systemic risk mitigation, advocating for a "same risk, same regulation" principle following previous digital asset market volatilities. Their proposals reportedly mandate stablecoin issuers to meet prudential standards akin to commercial banks, a move the Lords committee argues is disproportionate for certain stablecoin models and could deter legitimate players. HM Treasury, caught between these positions, has previously signaled support for digital finance but faces pressure to ensure market stability. The ball is now in the Bank of England court to respond to the parliamentary committee's recommendations. Future revisions to the regulatory framework will determine whether the UK can foster a competitive digital finance ecosystem without compromising financial stability. Observers will be watching closely to see if a more nuanced approach emerges, aligning the UK's regulatory stance with its stated goals for digital asset leadership amidst fierce global competition.