The Bank of England (BoE) has signaled a hands-on approach to digital currency regulation, proposing to limit individual holdings of systemic stablecoins to between £10,000 and £20,000. This measure stems from the central bank's assessment that stablecoins currently lack the inherent stability required for a more hands-off regulatory framework.

The proposed ownership caps are part of a broader regulatory regime for systemic payment systems that use stablecoins. The BoE's stated goal is to mitigate financial stability risks, preventing a potential bank run scenario on a widely used stablecoin that could impact the broader economy.

Crypto industry groups have voiced strong opposition, arguing that such stringent limits are 'unworkable' and could stifle innovation and adoption within the UK. The debate highlights the fundamental tension between fostering a competitive digital assets market and ensuring robust consumer protection and financial stability. This move indicates that UK regulators will prioritize caution and control as they integrate stablecoins into the formal financial system.