Coinbase CEO: UK’s Stablecoin Regulations Hinder Digital Finance Innovation

▲ Brian Armstrong, Coinbase, Stablecoin, UK / ChatGPT-generated image

Brian Armstrong, CEO of Coinbase, warned that “the UK’s proposed cap on stablecoin holdings could become a major obstacle to digital financial innovation,” delivering strong criticism toward regulators.

According to crypto-focused media outlet Decrypt on February 24 (local time), Armstrong criticized the Bank of England’s plan to impose limits on stablecoin holdings, arguing that it could jeopardize the UK’s status as a global financial hub. In a post on X (formerly Twitter), Armstrong stated, “The current direction of UK stablecoin regulation will act as a barrier that undermines the country’s competitiveness in the digital economy and stifles innovation.”

The Bank of England is reviewing a proposal to cap individual stablecoin holdings at £20,000 (approximately $26,350) and corporate holdings at £10 million (approximately $12.7 million). The proposal also includes a requirement that 40% of reserves be deposited in non-interest-bearing central bank accounts. Politicians and industry leaders in the UK have raised concerns that such regulations could hinder innovation and drive related industries overseas. Stand With Crypto UK, a civic group backed by Coinbase, has already gathered more than 80,000 signatures urging the government to adopt a more forward-looking stance.

For Coinbase, stablecoins have become more than just a payment tool—they are now a core revenue source. The company’s stablecoin-related revenue reached $1.35 billion in 2025, marking significant growth from $911 million the previous year. Analysts at Bloomberg Intelligence project that if the U.S. stablecoin regulatory bill known as GENIUS is enacted, Coinbase’s stablecoin revenue could increase by at least twofold and potentially as much as sevenfold. This suggests that stablecoins are evolving beyond a niche product into core financial infrastructure.

In the United States, a fierce legislative battle is also underway over whether stablecoins should be allowed to pay interest. Traditional banks, concerned that interest-bearing stablecoins could siphon off deposit funds, are calling for strict regulations—demands that have been reflected in the proposed CLARITY Act governing the structure of the U.S. crypto market. Last month, Armstrong withdrew his support for the bill, stating, “No bill is better than a bad bill.” The Donald Trump administration has since convened representatives from Coinbase, the banking sector, and the Crypto Council for Innovation to mediate discussions aimed at resolving the interest issue.

The direction of stablecoin regulation is a critical variable that will shape not only the revenue structures of exchanges like Coinbase but also the overall liquidity flows of the digital financial ecosystem. The balance struck between embracing innovation and managing risk in the UK and the U.S. is likely to reshape the global digital asset landscape. For stablecoins to establish themselves firmly within mainstream finance, the challenge will be achieving both profitability and financial system stability.

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