Reform UK leader accuses Bank of England of stifling crypto growth

TL;DR Breakdown

• Reform UK leader Nigel Farage has accused officials at the Bank of England of stifling crypto growth.
• Farage mentioned that BoE officials are knowingly stifling crypto growth by putting a cap on ownership.
• Bank of England governor Andrew Bailey remains skeptical about stablecoins amid debates on CBDC.

Reform UK leader Nigel Farage has launched a scathing attack on “dinosaur bureaucrats” at the Bank of England, accusing them of stifling the growth of digital assets by curbing their ownership. According to the Reform UK leader, the BoE, led by Governor Andrew Bailey, has been openly hostile to innovators, squandering the opportunity to become a world leader in cryptocurrency.

Officials in the United Kingdom announced this week that there are plans to cap the maximum amount of stablecoins that individuals can own at up to £20,000, while that of businesses is capped at £10 million. Unlike digital assets like Bitcoin, stablecoins are designed to be less volatile and pegged to fiat currencies like the dollar or pounds. The token is expected to make payments earlier by allowing users to send money across the world faster, cheaper, and anonymously.

Reform UK calls out the Bank of England’s stance on crypto

Bank of England officials have voiced their concerns over the use of digital assets, noting that it could weaken the banking system if users start to divert money from their bank accounts into crypto wallets. They noted that it could drain the banking system of vital cash. According to Farage, the move by the bank to curb digital assets would be felt across the economy, and could even hurt demand.

The Reform UK leader shared his opinion alongside the former Reform chairman Zia Yusuf. “Make no mistake: what the Bank announced is not some minor technical tweak. It is another example of unelected bureaucrats doing the most foolish thing possible and choking off British innovation and competitiveness,” they said. They added that the move will reduce demand for UK gilts while pushing the City of London further behind its rivals worldwide.

The pair noted that the United Kingdom has allowed what they described as “unelected dinosaur bureaucrats” to make rules that govern the future of the country’s financial system. “Parliament and thus the elected representatives of the British people have abdicated responsibility for setting direction. The consequence is obvious: Britain is losing ground.”

Bank of England governor remains skeptical of stablecoins

The stablecoin market has grown over the past few years, reaching almost $300 billion, and the recent move taken by the bank has drawn criticism from cryptocurrency and payment groups that have complained that it would put the country at a disadvantage compared to other countries. It is also anticipated that Rachel Reeves, the Chancellor, could also face a hard pushback from Bailey over her plans to push forward with cryptocurrencies.

While Bailey has not yet come out to outrightly reject stablecoins, he recently told MP sometime this year that he would need “a lot of convincing that the use case was made”. Meanwhile, Farage and Yusuf have noted that they would see to it that cryptocurrency becomes the norm if elected. “We have a choice. We can let the Bank of England cap innovation, stifle entrepreneurs and push capital offshore – or we can seize the opportunity, set the rules in Parliament and lead the world,” the pair said.

The Bank of England has not hidden its intention to introduce a central bank digital currency, a development that has raised concerns over data use and privacy. The pair noted that they would never back the proposal, noting that a digital pound run directly by the state would hand unprecedented control over financials to the Bank of England, creating the opposite of the open and competitive financial system that the country needs. “The future must be built on innovation from the ground up, with private sector stablecoins properly regulated, not imposed from the top down by a government-mandated currency,” they said.