- Britain plans a new Bank of England secondary objective to support stablecoin and digital money innovation.
- Financial stability would remain the Bank’s primary duty with annual reports to Parliament planned.
- Britain is also preparing stablecoin rules including a temporary £40 billion cap for each systemic token.
Britain stablecoins policy is moving toward a new role for the Bank of England as the government plans to give the central bank a secondary objective tied to innovation in stablecoins, digital money and payments. The proposal would be made through an amendment to the Financial Services and Markets Bill, while financial stability would stay the Bank’s main responsibility. The Treasury said the Bank would report to Parliament each year on its work to advance innovation in payment systems and digital money. The plan comes as Britain also develops a broader regulatory framework for traditional and tokenized payments, including stablecoins and tokenized deposits.
Britain stablecoins plan for the Bank of England
Britain plans to create a new statutory objective for the Bank of England that would support innovation in stablecoins and other forms of digital money. The change would not replace the central bank’s existing role, because financial stability would remain its primary duty under the proposal.
The government intends to introduce the measure through an amendment to the Financial Services and Markets Bill. According to the Treasury, the Bank would also be required to provide annual reports to Parliament explaining how it is helping advance innovation in digital money and payment systems.
Wider payments framework under development
The proposal would turn the government’s effort to modernize payments into a formal responsibility for the central bank. Britain is working toward a single regulatory framework that would cover both traditional payments and tokenized payments.
That broader work includes stablecoins and tokenized deposits. The government is also exploring how rules should adapt to AI agent payments as part of the wider review of digital finance and payment systems.
Britain stablecoins rules and temporary caps
The Bank of England in June removed proposed temporary limits on how many stablecoins individuals and businesses could hold. In their place, it set out a temporary issuance cap of 40 billion pounds, or $54 billion, for each systemic stablecoin.
Under the approach described, issuers could hold as much as 70% of their reserves in short-term British government debt. The rest would need to be kept as central bank deposits. Separately, the Financial Conduct Authority has finalized rules for crypto firms and stablecoin issuers, including simplified capital requirements that followed industry feedback.
Market activity and consumer use
The Financial Conduct Authority said firms can apply for authorization from Sept. 30. The regime is scheduled to take effect on Oct. 25, 2027, adding another timeline to Britain’s developing stablecoin framework.
The stablecoin market is valued at around $303 billion as of this writing, up from around $200 billion at the beginning of last year, according to DeFiLlama data. The lion’s share is currently made up of U.S.-dollar stablecoins. Visa data also showed retail investor-sized stablecoin transactions below $250 rising from $500 million in 2019 to nearly $70 billion last year.
Conclusion
Britain stablecoins policy is entering a new phase with plans to give the Bank of England a secondary objective focused on innovation in stablecoins, digital money and payments, while still keeping financial stability as the central bank’s main task. The proposal would require annual reporting to Parliament and sits alongside wider work on a single framework for traditional and tokenized payments. Recent decisions on a temporary 40 billion pound cap for each systemic stablecoin, reserve rules for issuers, and finalized Financial Conduct Authority requirements show that Britain is building out its regulatory approach as stablecoin use and market size continue to grow.
Disclaimer
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