UK Plans Unified Rules for Stablecoins, Tokenized Deposits in Payments Overhaul

The UK is moving to introduce a unified regulatory framework for payments that covers stablecoins and tokenized deposits, in a step toward bringing digital asset-based financial infrastructure into the regulated system.

The Block reported on April 21 that the UK Treasury had announced plans for a single framework spanning existing payment services, stablecoins and tokenized deposits.

The measure is part of a policy package unveiled during London Fintech Week. It is intended to modernize the payments system and respond to changes in digital finance. The UK also plans to establish a separate issuance regime for stablecoins used as a means of payment and pursue related legislation.

The Financial Conduct Authority's remit will also expand. That includes broader oversight of open banking and a review of whether payment activities carried out by AI agents should fall under regulation.

The government is also pushing legal revisions to ease the administrative burden on companies providing stablecoin payment services. The move is aimed at encouraging participation by companies in the early stages of the framework's rollout.

The UK Treasury said it would provide an additional 1 million pounds to the Centre for Finance, Innovation and Technology to support the financial innovation ecosystem. It also appointed Chris Woolard to lead the development of a tokenization-based wholesale financial system.

The UK government said digital assets and blockchain technology have the potential to reshape the structure of financial services. It said regulatory changes in the area would help strengthen the country's global financial competitiveness.