Cross-Party UK Support Emerges for Stablecoins as MPs Push Innovation-Friendly Rules

A coalition of U.K. lawmakers from across the political spectrum has called on Chancellor Rachel Reeves to step in on stablecoin regulation, warning that current proposals risk pushing innovation and capital out of Britain and weakening London’s standing as a global financial center.

In a letter dated Dec. 11, 2025, and addressed to the Chancellor, the group raised concerns that the Bank of England’s draft approach to stablecoins could deter investment and undermine the U.K.’s fintech competitiveness. The letter was signed by senior MPs and peers including Sir Gavin Williamson, Viscount Camrose and Baroness Verma.

The lawmakers said stablecoins — digital assets typically pegged to fiat currencies — are rapidly becoming foundational to the digital economy. They argued the technology is transforming financial infrastructure by cutting transaction costs, speeding up settlement times and expanding access to financial services.

“Stablecoins are reshaping financial infrastructure,” the group wrote, citing data showing transaction volumes reached $27.6 trillion in 2024, nearly 8% higher than the combined volumes processed by Visa and Mastercard. They added that Citibank projects stablecoin transactions could exceed $100 trillion by 2030.

Despite that growth, the lawmakers warned that the Bank of England’s proposed framework — which limits stablecoin use in wholesale markets, prohibits interest on reserves and caps individual holdings at £20,000 — risks leaving the U.K. on the sidelines of the next phase of financial innovation.

Such restrictions could make pound-backed stablecoins commercially unviable, they argued, encouraging market participants to migrate toward dollar-denominated alternatives such as USDC and USDT, which sit largely outside the U.K.’s regulatory scope.

“The result would be a shift from pound-backed digital assets to dollar-based ones, creating a two-tier system in which most on-chain activity is denominated and settled in U.S. dollars,” the lawmakers warned.

The intervention comes as the United States advances legislation such as the GENIUS Act to establish clearer rules for digital assets, raising concerns that policy inertia in the U.K. could erode London’s long-held leadership in fintech and capital markets.

The letter concludes by urging the government to adopt a forward-looking stablecoin framework that attracts international investment, supports high-value fintech growth and reinforces the U.K.’s position as a global innovation hub.

“We welcome your commitment to making the UK a world-leading destination for digital assets,” the lawmakers wrote. “Now is the time to turn that ambition into action.”