Brian Armstrong has stepped into the United Kingdom’s stablecoin debate with a warning that proposed limits from the Bank of England could weaken the country’s position in digital finance.
In a Feb. 24 post on X, Armstrong wrote:
“Stablecoin rules in the U.K. are being finalized, and are at risk of preventing the U.K. from being globally competitive in the digital economy.” He added that the “current direction of the rules does the opposite, and will act as an innovation blocker.”
His comments refer to draft proposals that would cap systemic stablecoin holdings at £20,000 for individuals and £10 million for businesses. The central bank has also proposed that issuers hold 40% of reserves in non-interest-bearing central bank accounts.
Petition gains momentum ahead of parliamentary threshold
Armstrong amplified a petition organized by Stand With Crypto UK, a trade advocacy group seeded by Coinbase in 2023. The petition calls on the British government to “drive a pro-innovation stablecoin and tokenization regulatory regime” and appoint a blockchain and crypto czar.
At the time of reporting, the petition had gathered more than 81,000 signatures. Under U.K. parliamentary rules, petitions that cross 100,000 signatures are considered for debate in Parliament. The deadline for signatures falls on March 3.
“The U.K has a long history of being a financial hub. Embracing and encouraging innovation, especially when other countries are moving fast here, is important for maintaining that,” Armstrong wrote.
The proposed caps form part of a broader effort by British authorities to limit systemic risk. Policymakers have expressed concern about large-scale outflows from commercial banks into digital tokens and the potential instability that could follow a sudden loss of confidence in a major stablecoin.
Industry concerns over scale and liquidity
Critics argue that hard limits on holdings could restrict both retail use and institutional participation in a global stablecoin market valued at more than $180 billion. They also question the requirement to hold a significant share of reserves in non-interest-bearing accounts, which could reduce issuer margins.
Some British lawmakers have warned that the measures could “deter innovation, limit adoption, and push activity overseas.” Others maintain that a tightly defined framework would provide clarity and safeguard financial stability.
Foreign-issued stablecoins such as USDC and Tether’s USD token would still operate in the U.K. under the draft structure. They would remain classified as non-systemic unless they achieve significant use in sterling-denominated payments.
The debate in London unfolds as other jurisdictions refine their own frameworks. Lawmakers in the United States and the European Union continue work on stablecoin legislation, which adds competitive pressure on financial centers that seek to attract digital asset activity.
Coinbase’s revenue stakes and U.S. legislative battles
Armstrong’s intervention in the U.K. arrives as Coinbase faces high-stakes regulatory negotiations at home. The exchange reported $1.35 billion in stablecoin revenue in 2025, up from $911 million the prior year. In the fourth quarter alone, stablecoin revenue reached $364 million, contributing to total Q4 revenue of $1.78 billion. The company also recorded a net loss of $667 million in that quarter.
In Washington, Coinbase withdrew support for a Senate draft of the CLARITY Act after Armstrong objected to provisions that would restrict stablecoin rewards and expand the authority of the Securities and Exchange Commission relative to the Commodity Futures Trading Commission.
“We’d rather have no bill than a bad bill,” Armstrong wrote at the time.
The yield issue has become a flashpoint. America’s banking lobby has pushed for restrictions on interest-bearing stablecoins amid concerns about deposit flight from traditional accounts. Draft language extended yield bans to exchanges, which could affect Coinbase’s revenue-sharing agreement tied to reserve income from USDC.
Despite the dispute, White House officials recently convened another meeting with banking representatives and the Crypto Council for Innovation to address stablecoin yield. No agreement has been announced.
Online backlash and competitive pressures
Armstrong’s comments on U.K. policy sparked debate on social media. Some users argued that regulatory uncertainty in the United States should take priority.
The broader question for Britain centers on balance. A strict regime may reduce systemic risk and shield banks from sudden liquidity shocks. However, caps on individual and business holdings may constrain scale in payments, treasury operations, and tokenized markets.
For London, long regarded as a premier global financial center, the final shape of stablecoin rules will carry reputational weight. Policymakers aim to contain risk. Industry leaders seek room to expand. The outcome will signal whether the U.K. intends to anchor digital asset finance within defined guardrails or allow greater latitude in pursuit of growth.
Oleksii Shumak
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