Bank of England Gets New Stablecoin Innovation Mandate
The UK plans a secondary Bank of England mandate for stablecoins and tokenized settlement, with annual reports to Parliament before a September Lords debate.
The UK government plans to give the Bank of England a secondary objective to support innovation in stablecoins and digital settlement. Financial stability remains the central bank's primary mandate.
Under the proposal, the Bank takes on a formal role in supporting innovation in systemic payment systems. The mandate covers emerging technologies and digital settlement assets including stablecoins and tokenized settlement. City Minister Lucy Rigby said tokenization and distributed ledger technology could reshape financial markets globally.
"Whilst financial stability will always remain the Bank’s primary objective, this secondary objective will support the Bank to continue to drive innovation in payments and digital finance," Rigby said.
The Bank already carries a secondary innovation objective for central counterparties and central securities depositories. Extending the same approach to systemic payment infrastructure puts stablecoin issuers and blockchain-based settlement models inside the same policy remit as other critical payment systems.
Deputy Governor for Financial Stability Sarah Breeden said the Bank welcomed the proposal, saying it would "further boost our work to support innovation in financial services without compromising on financial stability."
The government said the aim is to create conditions where new technologies can develop safely while contributing to economic growth. The proposal is part of a broader UK effort to modernize payments and keep regulated infrastructure resilient. The proposal requires the Bank to report annually to Parliament on how it is advancing the objective, and to set up a formal mechanism to measure progress.
Changes will come through amendments to the Financial Services and Markets Bill. The bill is scheduled for debate in the House of Lords on Sept. 7 and Sept. 9.
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