The UK Treasury will hand the Bank of England a new legal duty to support innovation in payments and digital money, including stablecoins. The secondary objective arrives through an amendment to the Financial Services and Markets Bill, sitting below the Bank's primary financial-stability mandate.
Treasury adds an innovation mandate
The Treasury said Wednesday it would create a statutory secondary objective covering payment systems and digital money, subordinate to the Bank of England's primary responsibility for financial stability. The duty arrives as an amendment to the Financial Services and Markets Bill, which is next due before the House of Lords on 7 and 9 September 2026. The Bank will have to report to parliament each year on how it advanced the objective.
City Minister Lucy Rigby said tokenization and distributed ledger technology could transform financial markets, and that the objective will help the Bank continue to drive innovation in payments and digital finance while keeping financial stability as its top priority. BoE Deputy Governor Sarah Breeden welcomed the move, saying it will further support the trust and innovation work the Bank already does with government and other authorities.
Building on the June rule changes
The mandate follows sustained criticism from crypto firms, which have accused the Bank of an overly conservative approach to digital assets. When the Bank set out its rules for sterling-pegged tokens in June, it dropped planned caps on how much of a stablecoin any one holder could own, replacing them with a £40 billion issuance limit, and cut the share of backing assets issuers must park in zero-interest deposits at the central bank.
Sasha Mills, the Bank's executive director for financial market infrastructure, has said the Bank treats stablecoins as "a new form of money" that must be equally robust as every other form. Applications from would-be issuers of systemic sterling stablecoins are due to open by the end of the year. Separately, the BoE's stablecoin consultation on its Code of Practice for systemic issuers closes 22 September 2026.
Closing the gap with the US and EU
The move comes amid mounting global competition on stablecoins. The EU's MiCA regime has applied to issuers since June 2024, with the full framework in force that December, and the US followed with the GENIUS Act last year. Some 99% of stablecoins in circulation are dollar-denominated, Mills said in May, leaving sterling tokens a sliver of a market the Bank now wants to grow.
Separately, the FCA's crypto authorisation window opens 30 September 2026, ahead of the full cryptoasset regulatory regime scheduled for 25 October 2027.
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