UK Treasury Backs Stablecoin Innovation with New Central Bank Objective

The UK Treasury has announced that it wants its central bank to support innovation in stablecoins and other digital money. The new objective for the Bank of England is to foster a regulatory framework that allows tokenization and distributed ledger technology (DLT) to develop safely.

According to City Minister Lucy Rigby, developments in digital payments technology have the potential to transform financial markets globally. While financial stability remains the primary objective of the Bank of England, this new secondary objective will support innovation in payments and digital finance.

The Bank of England will provide yearly reports on this objective to keep pace with technological changes. This move comes at a time when traditional banks and asset managers are moving deeper into the use of blockchain technology.

Recently, the bank has issued planned stablecoin rules and reduced the proportion of assets backing stablecoins that must be held in zero-interest accounts at the central bank. Crypto executives had previously criticized the bank for being too conservative in its approach to digital assets.