The Bank of England has watered down upcoming rules for cryptocurrency companies after Nigel Farage accused it of stifling growth.
The central bank has dropped plans aimed at capping the value of so-called stablecoins that can be held by individuals and businesses.
It comes after Mr Farage accused the Bank of being governed by “dinosaur bureaucrats” and said the rules would “choke off British innovation and competitiveness”.
The Bank confirmed on Monday that it had scrapped a proposal to introduce limits for stablecoins.
It had previously proposed capping ownership at £20,000 for individuals and £10m for businesses.
Instead, it said it would now cap the amount that a single issuer can release to £40bn.
Stablecoins are linked to currencies such as the dollar and pound and designed to take advantage of cryptocurrency’s benefits such as lower transaction costs without the volatility of Bitcoin and other coins.
They are issued by cryptocurrency firms such as Tether and Circle.
However, central bankers have feared that widespread use could affect their ability to manage the economy with monetary policy and affect lending if people withdraw cash from high street banks.
Writing last year, Mr Farage and his Reform UK colleague Zia Yusuf wrote: “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.
“It reduces relative demand for UK gilts and pushes the City of London further behind its global rivals.”
It marked Mr Farage’s latest attack against cryptocurrency regulation.
He has repeatedly clashed with the Bank of England, including on plans for a “Britcoin” digital currency and Threadneedle Street’s quantitative easing programme.
Earlier this year it emerged that he had received a £5m gift from crypto billionaire Christopher Harborne, which Mr Farage has said is unrelated to his political views. The parliamentary standards watchdog is investigating the gift.
Mr Harborne is a major shareholder in Tether.
The Bank’s plans had also been met with vocal opposition from the cryptocurrency industry.
On Monday, Sarah Breeden, the deputy governor for financial stability, said: “This is a major milestone in delivering greater choice and innovation in UK payments. Innovation thrives on trust.
“And today we’ve set out the foundations of that trust for a new form of money – with prompt redemption, strong protections and central bank support. This is truly a world-leading regime.”
Under the rules, the Bank expects stablecoins to enter a regulated “stablecoin regime” next year.
