A UK House of Lords committee has pressed the Bank of England to rethink parts of its proposed systemic stablecoin regime before final rules are set.

CoinDesk reported that the Lords Financial Services Regulation Committee's new report calls for the central bank to reconsider proposed holding limits on consumer stablecoins. The same report also questioned the proposed requirement that systemic stablecoin issuers keep at least 40% of backing assets in unremunerated central bank deposits.

The Bank of England's consultation, published in November, proposed temporary per-coin limits of £20,000 for individuals and £10 million for businesses, with exemptions for larger firms where needed. It also proposed allowing issuers to hold up to 60% of backing assets in short-term UK government debt, while the remaining 40% would sit in unremunerated accounts at the Bank.

The policy tension is straightforward. The Bank is trying to limit financial-stability risks if sterling stablecoins become widely used for payments, especially the risk that deposits move quickly out of commercial banks. The Lords committee is warning that strict limits and low-yield reserve requirements could make UK issuance less viable at an early stage of the market.

For crypto policy, the issue is less about whether stablecoins should be regulated than how quickly the UK wants sterling-denominated tokens to develop. A more conservative final rule could protect the banking system during adoption, but it may also leave UK users relying on dollar stablecoins and offshore regimes for practical payment use cases.