The UK government is amending the Financial Services and Markets Bill to give the Bank of England a secondary objective to support innovation in payment systems and digital money, including stablecoins, while financial stability remains its primary duty.
This legislative change aims to position the UK as a leader in digital finance and stablecoin innovation, potentially attracting investment and enhancing its global financial services competitiveness, while maintaining financial stability.
The UK government is amending the Financial Services and Markets Bill to introduce a new secondary objective for the Bank of England, tasking it with fostering innovation in payment systems and the development of digital currencies, including stablecoins. This move aims to bolster the UK's position as a global leader in financial services, though financial stability remains the Bank's primary duty.
City Minister Lucy Rigby stated that the new objective will help drive innovation in payments and digital finance, keeping the UK competitive. The Bank will now report annually to Parliament on its progress. The legislative path runs through the Financial Services and Markets Bill, next due in the House of Lords on September 7 and 9.
The Bank of England has already made preparatory changes, including dropping per-person holding caps for stablecoins and replacing them with a £40 billion issuance guardrail for systemic stablecoins. This policy shift signals that sterling stablecoin infrastructure is now a policy product, aiming to close the gap with regulatory regimes in the US and EU.
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