The Bank of England (BOE) has proposed a new regulatory framework for stablecoins, digital assets poised to play a significant role in payments. The plan seeks to prevent large-scale withdrawals from traditional banks into stablecoins by imposing temporary holding caps on individuals and businesses. 20,000 pounds for individuals and 10 million pounds for businesses, respectively. These limits are intended to mitigate the risk of sudden financial disruptions linked to stablecoin usage. Deputy Governor Sarah Breeden explained these measures reflect the UK’s reliance on a bank-dependent mortgage market, with the caps expected to be lifted once regulators believe systemic risks have subsided. 40% of the reserves in unremunerated deposits at the BOE will be held by systemically important stablecoins. The remaining 60% will be invested in short-term UK government bonds to maintain liquidity and ensure issuers have direct exposure to safe assets. However, the proposal has sparked criticism from the crypto industry. Concerns include potential stifle of innovation, weakening of UK competitiveness, and difficulties enforcing caps for non-exempt traders and retail participants. Exemptions are expected for large crypto exchanges and institutional investors.