STORY
The House of Lords Financial Services Regulation Committee has published a report warning that the UK is lagging behind the United States and the European Union in developing rules for stablecoins. The committee examined proposals from the Bank of England and the Financial Conduct Authority.
The report supports much of the direction of regulation but says ministers and regulators should reconsider parts of the proposed regime, including holding limits, backing asset requirements and restrictions on commercial banks issuing stablecoins. It also calls for more detail on how systemic stablecoins would be identified.
The issue is politically important because ministers want the UK to remain competitive in financial innovation while controlling risks from cryptoassets. The committee’s warning is that regulation must protect consumers and financial stability without closing down potential growth.