UK Plans New Bank of England Role to Support Stablecoins and Digital Payments
The UK government plans to give the Bank of England a new secondary objective to support innovation in payments and digital money, including stablecoins, while keeping financial stability as the central bank’s top priority.
The Treasury said the new objective would help ensure financial regulation keeps up with rapid changes in payment technology and digital finance.
Stablecoins are crypto tokens designed to maintain a stable value. They are widely used in crypto trading and are increasingly being used for payments.
Bank of England Deputy Governor Sarah Breeden welcomed the move, which comes as the UK works to build a clearer regulatory framework for the crypto industry.
The Financial Conduct Authority said in June that it would lower planned capital requirements for stablecoin issuers following concerns from the industry. The new rules are part of efforts to bring the crypto sector more fully under UK financial regulation.
Under the proposed changes, the Bank of England would also be required to report to Parliament each year on how it is supporting innovation in payments and digital finance.
City Minister Lucy Rigby said technologies such as tokenization could significantly change financial markets.
“Financial stability will always remain the Bank’s primary objective,” Rigby said, adding that the new role would help the UK remain a global leader in financial services.
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