The UK political scene has recently become lively. A group of cross-party MPs recently wrote a letter to Finance Minister Rachel Reeves, with the core message: The Bank of England's stablecoin regulation plan is too restrictive.

Where's the problem? The draft framework from the Bank of England imposes many restrictions on stablecoins—wholesale market bans, reserves cannot earn interest, and individual holdings are capped at £20,000. It sounds like risk control, but the MPs believe that if things continue this way, London's status as a global financial hub could be at risk.

Even more concerning is that these policies might push money into dollar stablecoins. Smart investors and fintech companies will vote with their feet, moving to jurisdictions with more friendly regulations. To solidify its position in global financial innovation, the UK needs to propose a more competitive and forward-looking stablecoin policy framework to retain large capital and innovative projects.