UK Gives Bank of England Mandate for Stablecoin Innovation

The UK government plans to give the Bank of England a new secondary objective to support innovation in payments, including stablecoins and other digital settlement assets. This move aims to keep regulation aligned with rapid technological change.

According to City Minister Lucy Rigby, technologies such as tokenization and distributed ledger technology could reshape financial markets globally. The Bank's existing innovation remit will be extended directly into payment systems, giving the central bank a clearer mandate to consider how regulation affects stablecoin issuers, tokenized payment networks, and blockchain-based settlement models.

The government plans to implement the change through amendments to the Financial Services and Markets Bill, which is scheduled for debate in the House of Lords on Sept. 7 and Sept. 9. The Bank will be required to report annually to Parliament on how it is advancing the innovation objective and create a formal mechanism to measure progress.