A UK House of Lords committee says current stablecoin regulation risks putting UK-issued pound stablecoins at a commercial disadvantage, arguing that Britain is behind the U.S. and the EU on the framework for the tokens. The committee calls on the Bank of England (BoE) and the Financial Conduct Authority (FCA) to review existing or proposed rules, warning that overly strict requirements could stifle growth rather than enable innovation.
While the committee supports regulation, it argues that the design of the rules could make pound stablecoins difficult to use in practice. In particular, the committee highlights concerns that regulatory conditions could render pound-linked tokens commercially unworkable, potentially limiting their ability to serve real-world payment and market needs.
The committee’s position emphasizes competitiveness and market development, urging regulators to adjust the approach so that compliance requirements do not prevent stablecoin products from reaching scale. The call comes as the UK compares its approach with other jurisdictions that have moved further on stablecoin policy and issuance frameworks.
