UK Hands Bank of England a Formal Stablecoin Mandate

HM Treasury will hand the Bank of England a statutory objective to support innovation in payment systems and emerging digital money, including stablecoins. The change, announced on 27 August 2026, gives the regulator a formal mandate covering digital settlement assets.

Financial stability remains the Bank's primary duty. The new objective sits below it and does not require the BoE to back any innovation that could undermine stability. For the first time, the regulator is legally obliged to help stablecoins and digital settlement assets develop within its oversight.

The structure extends a model the Bank already operates. A similar secondary objective for central counterparties and central securities depositories has been in place since the Financial Services and Markets Act 2023. HM Treasury said that arrangement is now being applied to systemic payment systems, including those using digital settlement assets such as stablecoins.

City Minister Lucy Rigby said tokenisation and distributed ledger technology have the potential to transform global financial markets. The new objective will help the Bank drive innovation in payments and digital finance, keeping the UK competitive as a global financial services hub, she said.

Bank of England Deputy Governor Sarah Breeden welcomed the move. The secondary objective will strengthen the Bank's ability to support innovation without compromising financial stability, she said. The Bank will report annually to Parliament on how it advanced the payments innovation agenda, giving lawmakers a recurring check on the mandate's use.

Earlier this year the BoE dropped per-person holding caps for stablecoin issuers, replacing them with a £40 billion guardrail on total stablecoin issuance. The earlier change set rules for issuers; the new objective extends to the systemic payment systems that use their tokens.