UK Government Gives Bank of England Stablecoin Innovation Mandate

The UK government is planning to give the Bank of England a new mandate to support innovation in digital payments, including stablecoins. This secondary objective would work alongside the central bank's main task of maintaining financial stability.

City Minister Lucy Rigby said that technology like tokenization and distributed ledger systems could change financial markets around the world. The government wants to give the Bank a clearer path to think about how rules affect stablecoin issuers, as well as tokenized payment networks and blockchain-based settlement tools.

The proposal is part of a bill moving through Parliament, which aims to help regulation keep pace with new payment technology. The Bank would have to report to Parliament each year on its progress in supporting innovation in payments, and a formal way to measure that progress would be set up.