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The UK government plans to give the Bank of England a new statutory objective to support payments innovation, extending the mandate to systemic payment systems involving stablecoins and other forms of digital money.
The secondary objective would sit below the Bank’s existing financial stability mandate, requiring it to consider innovation when regulating payment infrastructure where doing so does not undermine financial stability.
Proposed Payments Objective Would Extend to Systemic Stablecoins
The change would expand an innovation duty the Bank already has in parts of its financial-market infrastructure supervision.
Under the proposed amendments, the objective would also apply to systemic payment systems using digital settlement assets, including stablecoins.
The Bank would be required to report annually to Parliament on how it has supported innovation under the expanded mandate.
House of Lords Debates Scheduled for September 7 and 9
The government plans to introduce the change through amendments to the Financial Services and Markets Bill currently moving through Parliament. Further debate in the House of Lords is scheduled for September 7 and 9.
The proposal would not alter stablecoin regulation immediately, as Parliament must approve the legislation before the Bank receives the new statutory responsibility. Financial stability would remain the Bank’s primary objective.
Stablecoin Rule Consultation Remains Open Until September 22
The proposal comes as the Bank develops separate rules for systemic stablecoins covering areas including reserves, redemption, and safeguarding.
Comments on the current draft framework remain open until September 22. The Bank plans to finalize the rules by the end of 2026, with regulated stablecoins expected to begin operating under the UK regime in 2027.
