UK Plans BoE Innovation Mandate in Stablecoin Pivot

Britain is building a two-tier regulatory framework for sterling stablecoins. The Financial Conduct Authority will oversee qualifying issuers, while stablecoins deemed systemic will also fall under the Bank of England. For providers supplying fiat accounts, clearing and correspondent banking to digital-asset companies, the balance between financial stability and innovation will help determine whether regulated stablecoins can integrate with conventional banking and scale as a payments instrument.

HM Treasury said on Aug. 27 that it plans to give the Bank of England a secondary statutory objective to support innovation in payment systems, including stablecoins and other digital settlement assets. Financial stability will remain the Bank’s primary mandate, and it will report annually to Parliament on the innovation objective. The change will be added to the Financial Services and Markets Bill, scheduled for House of Lords debate on Sept. 7 and Sept. 9.