UK MPs caution that Bank of England's stablecoin initiatives may push innovation abroad.

Cross-Party Concerns: A group of UK parliamentarians, including notable figures like Sir Gavin Williamson and Lord Hart, has urged Chancellor Rachel Reeves to reconsider the Bank of England's proposed regulations on systemic stablecoins, warning that they could stifle innovation and drive capital offshore.

Impact on Digital Economy: The signatories of an open letter argue that stablecoins are becoming essential to the digital economy and that the proposed regulations could make the UK a "global outlier," hindering adoption and weakening London's position in the global market.

Regulatory Framework Critique: Critics, including industry leaders, express frustration that the Bank of England's proposed regulations treat stablecoins as niche products rather than integral components of financial infrastructure, potentially slowing down adoption in key areas.

Comparative Regulatory Landscape: The UK's proposed stablecoin regulations are seen as more restrictive than those in the EU and US, which could lead to a competitive disadvantage for the UK in attracting capital markets innovation, as firms may migrate to jurisdictions with more favorable regulations.