Overview
- The Treasury proposed on Thursday to add a secondary statutory objective requiring the Bank of England to consider and support innovation in payment systems and digital money, including stablecoins.
- That secondary objective would be explicitly subordinate to the Bank’s primary duty to protect financial stability and the Bank has said it will not be required to back innovations that threaten that stability.
- The change would be introduced as amendments to the Financial Services and Markets Bill and will face parliamentary debate when the bill returns to the House of Lords in early September, so the final wording and scope remain subject to approval.
- The Bank has already relaxed rules for sterling stablecoins this year by dropping planned individual ownership caps, setting a £40 billion issuance guardrail for systemic tokens, and loosening some reserve placement requirements.
- The measure will interact with the wider crypto framework the FCA finalised in June, which opens authorisation applications on Sept. 30, 2026 and schedules a mandatory regime from Oct. 25, 2027, and it is intended to help the UK compete with EU and US stablecoin regimes.