A cross-party group of U.K. lawmakers has urged Chancellor Rachel Reeves to intervene in the country’s stablecoin rulemaking process, warning that overly restrictive regulations could undermine Britain’s fintech leadership and push investment offshore.

In a letter dated Dec. 11, 2025, and addressed to the Chancellor, the coalition cautioned that proposals from the Bank of England risk weakening London’s position as a global financial center by discouraging innovation in digital assets. The letter was signed by several senior MPs and peers, including Sir Gavin Williamson, Viscount Camrose and Baroness Verma.

The lawmakers argued that stablecoins — digital tokens typically pegged to fiat currencies — are rapidly becoming a core component of the digital economy. They said the instruments are transforming payments and financial infrastructure by reducing transaction costs, accelerating settlement times and expanding financial inclusion.

“Stablecoins are reshaping financial infrastructure,” the group wrote, pointing to data showing transaction volumes reached $27.6 trillion in 2024, exceeding the combined activity of Visa and Mastercard by nearly 8%. Citibank forecasts that stablecoin transaction volumes could surpass $100 trillion by 2030, they added.

However, the lawmakers warned that the Bank of England’s draft framework — which limits stablecoin use in wholesale markets, bans interest on reserves and caps individual holdings at £20,000 — could leave the U.K. sidelined as the next wave of financial innovation unfolds.

Such restrictions, they argued, risk making pound-backed stablecoins uncompetitive, pushing users and developers toward dollar-denominated alternatives such as USDC and USDT, which fall largely outside the U.K.’s regulatory perimeter.

“The outcome would be a flight from pound-backed digital assets to dollar-based ones, creating a two-tier market in which most on-chain activity is denominated and settled in U.S. dollars,” the lawmakers warned.

The intervention comes as the United States moves ahead with the GENIUS Act, a legislative push aimed at providing regulatory clarity for digital assets. The group warned that continued policy uncertainty could erode London’s long-standing dominance in fintech and capital markets.

The letter concluded by calling for a forward-looking, innovation-friendly stablecoin framework that would attract international investment, support high-value fintech growth and reinforce the U.K.’s position as a global hub for financial innovation.

“We welcome your commitment to ‘making the UK a world-leading destination for digital assets,’” the lawmakers wrote. “Now is the time to deliver on this ambition. We urge you to intervene.”