Bank of England Confirms Temporary Stablecoin Limits to Boost Financial Stability

By: crypto insight|2025/10/16 20:20:01
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Imagine a financial world where new digital currencies like stablecoins burst onto the scene, promising faster transactions and broader access, but regulators step in to ensure the ride isn’t too bumpy. That’s exactly what’s happening in the UK, where the Bank of England is navigating the rise of stablecoins with a careful eye on stability. In a recent clarification, the bank’s deputy governor addressed concerns that proposed limits on stablecoin holdings and transactions might hinder innovation, emphasizing that these measures are just a short-term safeguard.

Why Temporary Stablecoin Limits Make Sense for Now

Picture stablecoins as the speedy new cars on the highway of finance—they’re efficient and user-friendly, but if everyone switches over too quickly, it could cause a massive traffic jam in the traditional banking system. Bank of England Deputy Governor Sarah Breeden highlighted this during her speech at DC Fintech Week, explaining that the limits are designed to give the financial ecosystem time to adapt. Originally proposed in a November 2023 discussion paper, these restrictions aim to prevent sudden shifts that could disrupt credit availability for businesses and households.

Industry voices raised alarms in September, pointing out that caps between roughly $13,000 and $26,000 (equivalent to 10,000 and 20,000 British pounds at the time) might scare off crypto businesses and paint the UK as unfriendly to digital assets. But Breeden reassured everyone that this isn’t the long-term plan. Instead, it’s a temporary bridge to a future where stablecoins play a key role in a diverse money system. She noted the bank’s goal is to monitor stablecoin adoption closely, allowing for gradual adjustments that maintain overall stability—especially crucial in the UK, where credit relies heavily on banks compared to markets like the US.

To back this up, consider real-world data: As of October 2025, stablecoin market capitalization has surged past $200 billion globally, according to recent reports from Chainalysis, underscoring the need for measured integration. This growth contrasts sharply with traditional banking deposits, which grew by only about 3% in the UK last year per Bank of England figures, highlighting why a sudden pivot could strain the system.

Stablecoin Rules Still Evolving with Industry Input

The rules aren’t carved in stone yet, which is great news for those eager to shape the future. Breeden announced that the Bank of England is set to launch a consultation before year’s end, seeking feedback on limit details and rollout strategies. Ideas on the table include higher thresholds for businesses and exemptions for major players like supermarkets, making it easier for everyday operations to incorporate stablecoins.

There’s even talk of special provisions for innovators in the UK’s digital sandbox, which kicked off in October 2024 as a safe space to test distributed ledger technologies. This approach shows the bank’s commitment to fostering growth while managing risks, much like how a gardener prunes a young tree to ensure it grows strong without toppling over.

For the latest buzz, Google searches for “UK stablecoin regulations 2025” have spiked by 40% this month, with users often asking about potential impacts on crypto investments. On Twitter (now X), discussions are heating up around hashtags like #StablecoinLimits and #BoEPolicy, with a recent post from the official Bank of England account on October 10, 2025, confirming the consultation’s focus on balancing innovation and safety. Industry leaders, including fintech influencers, have tweeted support for the temporary nature, noting it aligns with global trends seen in the EU’s MiCA framework, updated in mid-2025 to include similar adaptive limits.

Addressing Concerns Over Rapid Stablecoin Adoption

At the heart of the Bank of England’s worries is the potential for quick outflows from bank deposits into stablecoins, which could slash credit access if the infrastructure can’t scale fast enough. Breeden drew a clear line, stressing the need for the system to evolve gradually. This is particularly vital in the UK, where bank-based credit dominates more than in the US, backed by data from the World Bank showing UK bank lending at over 80% of total credit in 2024, versus around 50% in the US.

Yet, she’s optimistic about the bigger picture. While the central bank wants to keep its role in wholesale payments and asset settlements to minimize risks, Breeden acknowledged that not all transactions will rely solely on central bank money moving forward. Tokenized deposits and regulated stablecoins could fill gaps in emerging markets, creating a more resilient ecosystem.

This vision ties into broader brand alignment efforts in the crypto space, where platforms emphasize security and regulatory compliance to build trust. For instance, aligning with user-focused exchanges that prioritize seamless stablecoin trading can enhance overall market confidence, ensuring that innovations like these temporary limits ultimately support sustainable growth.

Speaking of reliable platforms, if you’re looking to dive into stablecoins with confidence, consider WEEX exchange. As a user-centric crypto trading hub, WEEX stands out for its robust security features, low fees, and commitment to regulatory standards, making it an ideal choice for both new and seasoned traders navigating the evolving landscape of digital assets. With tools that simplify stablecoin transactions and real-time market insights, WEEX helps users stay ahead while aligning perfectly with the push for stable, innovative finance.

Central Bank’s Call for Collaboration in Stablecoin Evolution

Breeden wrapped up by emphasizing that the Bank can’t go it alone—industry players, from established banks to fresh startups, need to collaborate on experiments and use cases. This teamwork is key to deploying technology that benefits everyone, avoiding unnecessary interconnections that could spark stability issues.

It’s a reminder that while stablecoins offer exciting possibilities—like faster, cheaper cross-border payments—they must integrate thoughtfully. Compare it to introducing electric vehicles: You don’t rip out all gas stations overnight; you build charging infrastructure steadily to keep things running smoothly. With the latest updates as of October 16, 2025, including an official Bank of England statement affirming no changes to the temporary framework yet, the path forward looks promising for a multi-money future.

FAQ

What are the proposed stablecoin limits in the UK, and why are they temporary?

The Bank of England has suggested caps on individual stablecoin holdings and transactions, roughly between $13,000 and $26,000, to prevent sudden disruptions in the financial system. These are temporary to allow gradual adaptation, with plans to lift them as the ecosystem stabilizes.

How might these stablecoin limits affect crypto innovation in the UK?

While some fear the limits could stifle growth by signaling a less welcoming environment, the Bank clarifies they’re short-term. Feedback from the upcoming consultation could lead to adjustments, like higher business limits, to support innovation without compromising stability.

Will stablecoins replace traditional banking in the UK?

Not entirely—stablecoins are seen as complementary in a multi-money system. The Bank aims to maintain its role in key settlements, but tokenized assets could handle other areas, fostering a balanced evolution backed by industry collaboration.

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Debunking the AI Doomsday Myth: Why Establishment Inertia and the Software Wasteland Will Save Us

Original Title: Against Citrini7Original Author: John Loeber, ResearcherOriginal Translation: Ismay, BlockBeats


Editor's Note: Citrini7's cyberpunk-themed AI doomsday prophecy has sparked widespread discussion across the internet. However, this article presents a more pragmatic counter perspective. If Citrini envisions a digital tsunami instantly engulfing civilization, this author sees the resilient resistance of the human bureaucratic system, the profoundly flawed existing software ecosystem, and the long-overlooked cornerstone of heavy industry. This is a frontal clash between Silicon Valley fantasy and the iron law of reality, reminding us that the singularity may come, but it will never happen overnight.


The following is the original content:


Renowned market commentator Citrini7 recently published a captivating and widely circulated AI doomsday novel. While he acknowledges that the probability of some scenes occurring is extremely low, as someone who has witnessed multiple economic collapse prophecies, I want to challenge his views and present a more deterministic and optimistic future.


Never Underestimate "Institutional Inertia"


In 2007, people thought that against the backdrop of "peak oil," the United States' geopolitical status had come to an end; in 2008, they believed the dollar system was on the brink of collapse; in 2014, everyone thought AMD and NVIDIA were done for. Then ChatGPT emerged, and people thought Google was toast... Yet every time, existing institutions with deep-rooted inertia have proven to be far more resilient than onlookers imagined.


When Citrini talks about the fear of institutional turnover and rapid workforce displacement, he writes, "Even in fields we think rely on interpersonal relationships, cracks are showing. Take the real estate industry, where buyers have tolerated 5%-6% commissions for decades due to the information asymmetry between brokers and consumers..."


Seeing this, I couldn't help but chuckle. People have been proclaiming the "death of real estate agents" for 20 years now! This hardly requires any superintelligence; with Zillow, Redfin, or Opendoor, it's enough. But this example precisely proves the opposite of Citrini's view: although this workforce has long been deemed obsolete in the eyes of most, due to market inertia and regulatory capture, real estate agents' vitality is more tenacious than anyone's expectations a decade ago.


A few months ago, I just bought a house. The transaction process mandated that we hire a real estate agent, with lofty justifications. My buyer's agent made about $50,000 in this transaction, while his actual work — filling out forms and coordinating between multiple parties — amounted to no more than 10 hours, something I could have easily handled myself. The market will eventually move towards efficiency, providing fair pricing for labor, but this will be a long process.


I deeply understand the ways of inertia and change management: I once founded and sold a company whose core business was driving insurance brokerages from "manual service" to "software-driven." The iron rule I learned is: human societies in the real world are extremely complex, and things always take longer than you imagine — even when you account for this rule. This doesn't mean that the world won't undergo drastic changes, but rather that change will be more gradual, allowing us time to respond and adapt.


The Software Industry Has "Infinite Demand" for Labor


Recently, the software sector has seen a downturn as investors worry about the lack of moats in the backend systems of companies like Monday, Salesforce, Asana, making them easily replicable. Citrini and others believe that AI programming heralds the end of SaaS companies: one, products become homogenized, with zero profits, and two, jobs disappear.


But everyone overlooks one thing: the current state of these software products is simply terrible.


I'm qualified to say this because I've spent hundreds of thousands of dollars on Salesforce and Monday. Indeed, AI can enable competitors to replicate these products, but more importantly, AI can enable competitors to build better products. Stock price declines are not surprising: an industry relying on long-term lock-ins, lacking competitiveness, and filled with low-quality legacy incumbents is finally facing competition again.


From a broader perspective, almost all existing software is garbage, which is an undeniable fact. Every tool I've paid for is riddled with bugs; some software is so bad that I can't even pay for it (I've been unable to use Citibank's online transfer for the past three years); most web apps can't even get mobile and desktop responsiveness right; not a single product can fully deliver what you want. Silicon Valley darlings like Stripe and Linear only garner massive followings because they are not as disgustingly unusable as their competitors. If you ask a seasoned engineer, "Show me a truly perfect piece of software," all you'll get is prolonged silence and blank stares.


Here lies a profound truth: even as we approach a "software singularity," the human demand for software labor is nearly infinite. It's well known that the final few percentage points of perfection often require the most work. By this standard, almost every software product has at least a 100x improvement in complexity and features before reaching demand saturation.


I believe that most commentators who claim that the software industry is on the brink of extinction lack an intuitive understanding of software development. The software industry has been around for 50 years, and despite tremendous progress, it is always in a state of "not enough." As a programmer in 2020, my productivity matches that of hundreds of people in 1970, which is incredibly impressive leverage. However, there is still significant room for improvement. People underestimate the "Jevons Paradox": Efficiency improvements often lead to explosive growth in overall demand.


This does not mean that software engineering is an invincible job, but the industry's ability to absorb labor and its inertia far exceed imagination. The saturation process will be very slow, giving us enough time to adapt.


Redemption of "Reindustrialization"


Of course, labor reallocation is inevitable, such as in the driving sector. As Citrini pointed out, many white-collar jobs will experience disruptions. For positions like real estate brokers that have long lost tangible value and rely solely on momentum for income, AI may be the final straw.


But our lifesaver lies in the fact that the United States has almost infinite potential and demand for reindustrialization. You may have heard of "reshoring," but it goes far beyond that. We have essentially lost the ability to manufacture the core building blocks of modern life: batteries, motors, small-scale semiconductors—the entire electricity supply chain is almost entirely dependent on overseas sources. What if there is a military conflict? What's even worse, did you know that China produces 90% of the world's synthetic ammonia? Once the supply is cut off, we can't even produce fertilizer and will face famine.


As long as you look to the physical world, you will find endless job opportunities that will benefit the country, create employment, and build essential infrastructure, all of which can receive bipartisan political support.


We have seen the economic and political winds shifting in this direction—discussions on reshoring, deep tech, and "American vitality." My prediction is that when AI impacts the white-collar sector, the path of least political resistance will be to fund large-scale reindustrialization, absorbing labor through a "giant employment project." Fortunately, the physical world does not have a "singularity"; it is constrained by friction.


We will rebuild bridges and roads. People will find that seeing tangible labor results is more fulfilling than spinning in the digital abstract world. The Salesforce senior product manager who lost a $180,000 salary may find a new job at the "California Seawater Desalination Plant" to end the 25-year drought. These facilities not only need to be built but also pursued with excellence and require long-term maintenance. As long as we are willing, the "Jevons Paradox" also applies to the physical world.


Towards Abundance


The goal of large-scale industrial engineering is abundance. The United States will once again achieve self-sufficiency, enabling large-scale, low-cost production. Moving beyond material scarcity is crucial: in the long run, if we do indeed lose a significant portion of white-collar jobs to AI, we must be able to maintain a high quality of life for the public. And as AI drives profit margins to zero, consumer goods will become extremely affordable, automatically fulfilling this objective.


My view is that different sectors of the economy will "take off" at different speeds, and the transformation in almost all areas will be slower than Citrini anticipates. To be clear, I am extremely bullish on AI and foresee a day when my own labor will be obsolete. But this will take time, and time gives us the opportunity to devise sound strategies.


At this point, preventing the kind of market collapse Citrini imagines is actually not difficult. The U.S. government's performance during the pandemic has demonstrated its proactive and decisive crisis response. If necessary, massive stimulus policies will quickly intervene. Although I am somewhat displeased by its inefficiency, that is not the focus. The focus is on safeguarding material prosperity in people's lives—a universal well-being that gives legitimacy to a nation and upholds the social contract, rather than stubbornly adhering to past accounting metrics or economic dogma.


If we can maintain sharpness and responsiveness in this slow but sure technological transformation, we will eventually emerge unscathed.


Source: Original Post Link


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