UK Gives BoE New Duty to Boost Digital Finance Innovation

The UK Treasury has assigned the Bank of England (BoE) a new legal duty to support innovation in payments and digital finance. This change is significant, as it marks a shift away from the cautious stance the BoE took on stablecoins for years.

The BoE will now have to report annually on its goal to promote financial technology growth, keeping the financial system stable while fostering new innovations.

The regulatory changes include removing per-user caps on stablecoin issuance and setting a £40 billion total limit. Additionally, reserve rules have been eased to allow issuers to hold more interest-bearing assets.