UK Reform Party opposes Bank of England’s stablecoin limits and CBDC plans
The United Kingdom’s minority celebration 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 celebration’s head of coverage, Zia Yusuf, alongside celebration figurehead Nigel Farage, warned that the measures would injury Britain’s competitiveness within the international digital economic system.
Last week, the Bank of England proposed limiting stablecoin publicity for people and companies. Under the draft proposal, residents could be restricted to holding between £10,000 and £20,000 in systemic stablecoins, whereas companies would face a most cap of £10 million.
The regulator argues that the plan goals to scale back monetary dangers as digital belongings turn into extra mainstream.
However, the Reform celebration leaders framed the proposal as an assault on innovation reasonably than a safeguard.
They argued that limiting the use of stablecoins dangers choking off demand for British authorities debt whereas strengthening the place of international rivals.
According to the assertion, greenback–pegged stablecoins like USDC and USDT funnel vital liquidity into US Treasuries, reinforcing the greenback’s dominance in digital finance. By distinction, the UK lacks any mechanism equal to a backstop demand for gilts.
Yusuf wrote:
“Now ask your self: the place is the British equal? Where is the pound-backed stablecoin with deep liquidity, one which international markets can belief, one which channels recent demand into UK gilts? It doesn’t exist, as a result of policymakers right here have been overtly hostile to innovators. Instead of constructing the longer term, Britain’s regulators have smothered it.”
Considering this, Yusuf argued that “stablecoins should not a hazard to monetary stability.” Instead, he described the belongings as:
“[A] bridge between the digital world and the normal banking system. A bridge between entrepreneurs and clients, between buyers and alternative. They are merely new wrappers round cash – safer, sooner, programmable cash that may settle immediately throughout borders with out pricey intermediaries.”
No to CBDC
The Reform Party has additionally fought arduous towards the creation of a digital pound.
According to the celebration, a state-backed CBDC would hand the Bank of England “unprecedented management” over monetary exercise, stifling competitors and discouraging private-sector innovation.
Instead, they advocate for regulated, privately issued stablecoins that would drive development with out giving authorities entities direct management over residents’ wallets.
To assist that strategy, the celebration mentioned it might advance its proposed Cryptoassets and Digital Finance Bill to determine a clear and proportionate regulatory framework.
By creating guidelines that stability shopper safety with market freedom, Reform argues the UK may emerge as a pacesetter within the international stablecoin race and generate new employment alternatives in fintech and digital finance.
The stance marks one other step within the celebration’s embrace of crypto. Earlier this 12 months, it turned one of the primary political teams within the UK to simply accept donations in Bitcoin and different digital belongings.
[Editor’s Note: Context on UK politics.
Reform holds five parliamentary seats within the current government behind Labour, Conservatives, Liberal Democrats, SNP, and Sinn Féin. It has minimal sway in current UK legislation.
However, a collapse in support for Labour has placed Reform at the top of YouGov polling for the over-50s around a hypothetical snap election. The next election is scheduled for 2029.]
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