UK Lords Warn Stablecoin Rules Risk Hindering Sterling Token Adoption vs $315B Global Market

According to the UK House of Lords Financial Services Regulation Committee, the committee warned on June 3 that Britain's proposed stablecoin regulatory framework risks being too restrictive compared with the U.S. and EU, potentially limiting market growth before sterling tokens reach meaningful adoption.

The committee's report, "Stablecoins: waiting for regulation," criticized several aspects of the Bank of England's proposals, including a requirement for systemic sterling stablecoin issuers to hold at least 40% of backing assets in unremunerated central bank deposits, holding caps of £20,000 for individuals and £10 million for businesses, and restrictions on commercial banks issuing stablecoins directly. The FCA's capital requirement that scales with issuance volume, rather than risk profile, also faced scrutiny. The full FCA cryptoasset regime is expected to take effect on October 25, 2027. The global stablecoin market stood at $315 billion in 2026, while the UK's only fiat-referenced stablecoin, tokenized GBP, had a market cap of $1.53 million as of March 2026.