UK Mandate Drives Stablecoin Innovation Amid Growing Market

The United Kingdom government has announced plans to introduce a new secondary statutory objective for the Bank of England (BoE) aimed at driving innovation in stablecoins and digital payments. The measure will be implemented through an amendment to the Financial Services and Markets Bill, which will require the central bank to submit annual reports to Parliament on its progress.

The BoE's primary responsibility remains financial stability, but this new mandate will allow it to focus on modernizing payments systems, building a unified regulatory framework for traditional and tokenized payments, including stablecoins and tokenized deposits. The initiative also aims to address payments made by artificial intelligence agents.

City Minister Lucy Rigby stressed that the UK's financial stability will remain the BoE's primary objective, but the new mandate will enable it to continue driving innovation in payments and digital finance, making the UK a global leader in financial services.

The Financial Conduct Authority (FCA) has finalized rules for stablecoin issuers, with authorization applications opening on September 30. The regime will come into effect on October 25, 2027, and will require firms to hold up to 70% of their reserves in short-term British government debt.