Aave Founder Stani Criticizes UK Stablecoin Regulation: 30% Interest-Free Reserve Will Kill Local Issuance, UK May Struggle to Compete with US

CoinFeed June 22 news, Aave founder Stani posted on X stating that although the Bank of England removed the £20,000 individual stablecoin holding limit, it still requires issuers to deposit 30% of reserves into a central bank non-interest-bearing account. Stani pointed out that this severely undermines the economics of stablecoin issuance, effectively taxing issuers and potentially forcing companies to move to offshore markets. Additionally, the UK's cap on stablecoin issuance at £40 billion will also stifle growth. He believes that on-chain bookkeeping is not fundamentally different from existing payment institution databases, and regulation should remain technology-neutral, otherwise the UK may struggle to compete with the US.