Bank of England set for new innovation mandate covering stablecoins The UK plans to expand the Bank of England’s remit to support digital payments innovation, including stablecoins, while keeping financial stability first.
The UK is moving to put stablecoins at the center of a new Bank of England mandate aimed at supporting innovation in digital payments
The government plans to give the Bank of England, the UK’s central bank, a secondary objective to support innovation in payment systems and emerging forms of digital money, HM Treasury announced on Thursday. The mandate will cover payment systems that use digital settlement assets such as stablecoins, while financial stability will remain the BoE’s primary objective. The proposal comes as the UK steps up its work on stablecoins through regulatory changes, payment experiments and closer coordination with the US.
BoE innovation mandate faces September debate The new responsibility would extend an existing approach used to regulate central counterparties (CCPs) and central securities depositories (CSDs), which help clear, hold and settle financial assets. Under the proposed change, the central bank would report annually to Parliament on its progress toward the payments innovation objective. “Developments in digital payments technology, including tokenisation and DLT [distributed ledger technology], have the potential to transform financial markets across the globe,” City Minister Lucy Rigby said. The government expects to implement the objective through amendments to the Financial Services and Markets Bill, which is scheduled for further debate in the House of Lords on Sept. 7 and 9.