U.K. to Require BOE to Support Stablecoin, Digital Payments Innovation

The U.K. government plans to give the Bank of England a legal duty to support innovation in stablecoins and other forms of digital money.

The Financial Times reported on Aug. 27 that the U.K. Treasury has decided to amend the Financial Services and Markets Act to add support for innovation in payment systems and digital currencies to the BOE's secondary objective. The principle that maintaining financial stability remains the central bank's top priority would be unchanged.

If the amendment passes, the BOE would be required to support the development of new digital payment instruments, including stablecoins and tokenized deposits, and report related activities to Parliament each year.

Lucy Rigby, the U.K. Treasury's economic secretary, said financial stability would "always remain the Bank of England's primary objective." The new secondary objective, she added, would help spur innovation in payments and digital finance and support Britain's position as a global financial center.

Separately, the Financial Conduct Authority recently finalized a separate regulatory framework for crypto firms and stablecoin issuers in the U.K. Companies will be able to apply for licenses starting Sept. 30. The new regime will take effect in October 2027.