Coinbase Urges UK Regulators to Remove Proposed Limits on Pound-Backed Stablecoins
Tom Duff Gordon, Vice President for International Policy at Coinbase, has called on British regulators to scrap proposed restrictions on pound-backed stablecoins during a hearing before the Financial Services Regulation Committee of the House of Lords.
According to a report by The Block, Duff Gordon warned that the limits proposed by the Bank of England could prevent sterling-denominated stablecoins from reaching the scale required to function as effective infrastructure for settling digital financial transactions.
He added that the final design of the UK’s stablecoin regulatory framework will determine whether London can maintain its status as one of the world’s leading financial centers over the coming decade. Duff Gordon noted that the gap between the government’s ambitions and the current regulatory proposals is “too wide,” potentially putting the United Kingdom at risk of falling behind in the adoption of modern financial technologies.
His remarks focused particularly on the temporary limits proposed by the Bank of England for so-called “systemic” stablecoins, which would cap the amount individuals and businesses can hold. According to Duff Gordon, such restrictions—despite good intentions—could undermine the role of stablecoins in facilitating settlement across tokenized financial markets, including government bonds and other digital financial instruments.
He outlined five key recommendations for strengthening the UK’s stablecoin framework:
Removing the proposed holding limits set by the Bank of England.
Allowing a higher share of reserves to be invested in short-term government securities rather than cash.
Enabling the use of stablecoins for wholesale financial settlements.
Pursuing international equivalence agreements to align UK regulations with global standards.
Allowing distributors such as Coinbase to offer rewards to stablecoin holders in order to encourage adoption.
Duff Gordon emphasized that, unlike traditional bank deposits, stablecoins are fully backed and do not involve maturity transformation, reducing the likelihood of liquidity crises or sudden runs on assets.
He also welcomed the Bank of England’s proposal to create liquidity facilities enabling providers to exchange high-quality assets for cash during periods of stress, thereby reducing the need for emergency asset sales.
Meanwhile, Keith Grose, Managing Director of Coinbase in the UK, stressed that the priority should be making the regulatory framework workable by ensuring timely licensing, appropriate rules, and reliable access to banks and payment infrastructure.
Grose warned that regulatory uncertainty could push innovation and financial activity outside the country, whereas well-designed regulation would strengthen confidence, encourage domestic innovation, and support the long-term role of the British pound within the emerging digital economy.