Brian Armstrong, CEO of Coinbase, warned that the Bank of England’s proposed limits on stablecoins could undermine the UK’s position as a global financial hub. The exchange has been constantly fighting battles with Washington’s regulators and lawmakers that have a direct impact on the revenue model.
Armstrong opposes the limits on UK stablecoin caps
Armstrong posted on X on Tuesday that the stablecoin rules are being finalized in the UK, preventing the country from being globally competitive in the digital economy. “The current direction of the rules does the opposite and will act as an innovation blocker,” he added.
His post highlighted a petition by Stand With Crypto UK, a trade advocacy group initiated by Coinbase in 2023. With the agenda set out a pro-innovation strategy for blockchain and stablecoins, it gathered over 80,000 signatures ahead of its deadline.
The agenda focused on driving a pro-innovation stablecoin and tokenization regulatory regime while exploring the government uses for blockchain and appointing a blockchain & crypto czar.
The UK’s proposed stablecoin rules
The Bank of England suggested strict limits on stablecoin usage. Individual holdings are capped at $26,350, while business holdings are at $12.7 million. Issuers would have to keep 40% of their reserves in non-interest-bearing central bank accounts. This could mean that the issuers can’t earn yield on the fund.
Coinbase recorded earnings of $1.35 billion in stablecoin revenue in 202. Moving up from $911 million last year, with $364 million being recorded in the fourth quarter.
Bloomberg Intelligence analysts estimate the numbers could grow almost two to sevenfold under the U.S. GENIUS Act, creating the first federal stablecoin framework and allowing crypto companies to offer higher yields on deposits.
‘Rather have no bill than a bad bill’ says Armstrong
Armstrong believes that the Clarity Act will aggravate issues. He explained the limitations of the bill, including a de facto ban on tokenized equities and restrictions on DeFi that would grant the government more control over individual financial records. This could also mean undermining the CFTC’s authority while constraining innovations.
“We’d rather have no bill than a bad bill,” he wrote on his X post last month, asserting that this fight is for economic freedom.
