The Bank of England is getting a new job. Alongside its primary duty to maintain financial stability, the central bank will now have a secondary legal obligation: support innovation in payment systems and digital money, stablecoins included.
HM Treasury confirmed the objective will be written into the Financial Services and Markets Bill. The legislation heads to the House of Lords in September. Debate is scheduled for Sept. 7 and 9, 2026. The Bank must report to Parliament annually on progress. The practical effect: innovation becomes a statutory consideration, not just stability.
“Whilst financial stability will always remain the Bank’s primary objective, this secondary objective will support the Bank to continue to drive innovation in payments and digital finance, ensuring that the UK remains a global leader in financial services,” City Minister Lucy Rigby said in a statement. Tokenization and distributed ledger technology, she added, could transform financial markets.
Sarah Breeden, deputy governor for financial stability, welcomed the shift. “The bank is doing a huge amount, together with government and other authorities, to maintain trust and drive innovation in UK payments,” she said. “This new secondary objective will further support that.”
Crypto firms have been vocal. They accuse the Bank of excessive caution on digital assets. Current BoE rules for systemic stablecoins require issuers to hold at least 30% of backing assets in non-interest-bearing deposits at the central bank, per Cointelegraph. The Bank previously scrapped per-holder caps. Those would have limited individuals to 20,000 British pounds and businesses to 10 million pounds. Instead, it imposed a temporary 40 billion pound ($52.9 billion) issuance limit per systemic stablecoin. Decrypt confirmed the change.
Sasha Mills, executive director for financial market infrastructure, spoke at a conference in May. The BoE treats stablecoins as “a new form of money,” she said. They must be “equally resilient” as every other form. One problem: 99% of stablecoins in circulation are dollar-denominated. Sterling tokens are a sliver.
Industry reaction was measured. Maksym Sakharov, co-founder and CEO of on-chain banking infrastructure provider WeFi, told Cointelegraph that the objective “is secondary to financial stability, so it overrides nothing, but the bank will have to publish an annual account of its innovation efforts in payments and digital money.” The reserve requirement, he noted, is the first constraint worth revisiting. It could determine whether a stablecoin business is commercially viable.
The pipeline is busy. In August, a group in the Bank of England’s Digital Pound Lab started testing whether a stablecoin and a simulated digital British pound could work together in a cross-border trade payment. The tests used neither real customers nor real money. In mid-July, the UK and US published a joint statement. They “intend to enable the use of stablecoins in cross-border finance” and called for better alignment of regulatory frameworks. The EU’s MiCA regime has applied to stablecoin issuers since June 2024. The full framework took effect that December. The US followed with the GENIUS Act last year.
The Bank’s governor has flagged another issue. A tussle with Washington over who supervises stablecoins is coming. Applications from would-be issuers of systemic sterling stablecoins are due to open by the end of the year.
