The UK House of Lords Financial Services Regulatory Committee has urged the Bank of England to reconsider its proposed restrictions on stablecoin holdings. In a recent report, the committee advised against preemptive caps, suggesting that limits should only be applied if financial stability risks become evident. The Bank of England had suggested a cap of £20,000 for individuals and £10 million for businesses per stablecoin. The report also raised concerns about the reserve asset rule, which could affect the commercial viability of UK stablecoin issuers. The Bank of England's Deputy Governor recently acknowledged that the proposed caps and reserve requirements might be overly conservative. He indicated that alternative methods to manage stablecoin risks are under consideration, reflecting a potential shift in regulatory approach.