BoE Targets Stablecoin Innovation Amid US Treasury's GENIUS Act Push

The Bank of England (BoE) has been given new marching orders to focus on ensuring that UK payments regulation keeps pace with technological change and promotes innovation. The move comes as the stablecoin market continues to grow, with a recent reversal in the three-month slide in market cap. The BoE will be required to update Parliament annually on its progress in driving innovation in payments and digital finance.

The government has also announced that it will formalize this new objective via amendments to the Financial Services and Markets Bill, which will be debated by the House of Lords on September 7 and 9. The BoE is tasked with overseeing sterling-backed 'systemic stablecoins' that could pose a threat to the nation's financial system.

In the US, efforts continue to implement the GENIUS Act, which requires stablecoin issuers to hold a US federal- or state-issued license to participate in America's financial system. The Treasury Department has proposed rules to clarify what it means to 'issue a payment stablecoin in the United States', as well as define what constitutes a stablecoin offer or sale to people in the US.

The proposed GENIUS rules are facing pushback from the crypto crowd, which focuses on the Act's anti-money laundering (AML) and sanctions-evasion provisions. Stablecoin issuers like Tether and Circle already hold significant amounts of short-term Treasuries, with Tether claiming to hold $115 billion worth.