The Bank of England would keep financial stability as its core responsibility under the proposed changes, while taking on an additional role focused on advancing innovation in stablecoins and digital money.
The UK government plans to establish a new statutory secondary objective for the central bank through an amendment to the Financial Services and Markets Bill. The Bank would also be required to submit annual reports to Parliament explaining how it has supported innovation in payments and digital finance, according to the Treasury.
The proposal would formally incorporate payment innovation into the Bank of England’s responsibilities. Britain is developing a broader regulatory framework covering both traditional and tokenized payment systems, including stablecoins and tokenized deposits. Officials are also examining how future rules could apply to payments made by AI agents.
City Minister Lucy Rigby said the Bank’s focus on financial stability would not change. The new objective, she said, would instead encourage innovation in payments and digital finance while helping the UK maintain its position as a global financial-services leader, according to the Financial Times.
UK Moves Forward With Stablecoin Regulation
The Bank of England changed its approach to stablecoin holdings in June, abandoning proposed temporary limits on the amount that individuals and businesses could own. Instead, it proposed a temporary £40 billion ($54 billion) issuance cap for each stablecoin designated as systemic.
Under the proposed rules, issuers could invest up to 70% of their reserves in short-term UK government debt, while the remainder could be held as deposits with the central bank.
The Financial Conduct Authority has separately finalized rules covering crypto companies and stablecoin issuers. The framework includes simplified capital requirements introduced after consultation with the industry.
Eligible firms will be able to apply for authorization from Sept. 30, with the new regulatory framework expected to become effective on Oct. 25, 2027.
The global stablecoin market is now valued at about $303 billion, according to DeFiLlama, compared with roughly $200 billion at the start of last year. Dollar-pegged stablecoins account for most of the market.
Smaller stablecoin transactions are also becoming more common. Visa data indicates that transactions below $250 grew from approximately $500 million in 2019 to nearly $70 billion last year, reflecting increased retail usage.
The Treasury had not provided a response to CoinDesk’s request for comment when the report was published.
