Bank of England Handed New Legal Duty to Foster Stablecoin Innovation
The UK Treasury will give the Bank of England a new legal secondary duty to promote innovation in payments and digital money, while keeping financial stability as its primary objective. The change, to be added to the Financial Services and Markets Bill, will require annual reporting to संसद. Ministers say the goal is to help the UK lead in financial services and support technologies like tokenization and distributed ledger systems. The move reflects pressure on the Bank to speed up its approach to stablecoins and other digital assets. The Bank has already softened parts of its sterling stablecoin rules, including dropping proposed holding caps and lowering some reserve requirements to improve commercial viability. Bank officials welcomed the new duty. Applications for systemic sterling stablecoin issuers are expected to open by year-end. The UK is acting amid growing international competition, with the EU and U.S. already moving ahead on stablecoin regulation, while dollar-backed tokens still dominate the market.
