UK Gives Bank of England Stablecoin Innovation Mandate

The UK government is planning to give the Bank of England a new secondary objective to support innovation in payment systems, including stablecoins. This move comes as stablecoin capitalization has reached roughly $303 billion, with Tether's USDT accounting for about $183.3 billion and Circle's USDC valued at approximately $73.92 billion.

The proposed change would expand the central bank's existing innovation responsibility for central counterparties and central securities depositories to systemic payment systems. Financial stability would remain the Bank's primary objective, meaning it would not have to support innovation where doing so could threaten stability.

Under the new objective, the Bank of England would have to consider innovation when overseeing payment systems, including those that use digital settlement assets such as stablecoins. The government said this is intended to help UK payments regulation keep pace with technological developments and create conditions for new technologies and business models to develop safely.