Bank of England Plans to Match US Pace on Stablecoin Regulation: Report

The Bank of England (BoE) has pledged to implement a stablecoin regulatory framework at a pace that keeps up with the US, signalling a stronger commitment to supporting the responsible growth of digital assets in the UK. Reuters reports that BoE Deputy Governor Sarah Breeden said that the central bank is getting ready to finalise its strategy for managing stablecoins used for payments and settlement. The comments follow growing pressure on UK regulators to accelerate crypto oversight as global jurisdictions, including the US and the EU, advance their own frameworks. 

UK's Financial Regulators Push Broader Access to Digital Assets as Oversight Expands

It is anticipated that the BoE will establish regulations that distinguish between smaller issuers that function on a restricted scale and large-scale or "systemic" stablecoins, which may be widely utilised for payments. The Financial Conduct Authority (FCA) will supervise the latter category, while the BoE will handle oversight of payment-focused stablecoins to ensure financial stability.

Speaking at a policy conference in London, Deputy Governor Sarah Breeden said, “We are moving just as quickly as the US to put in place a stablecoin regulatory regime that protects consumers and supports innovation.” Breeden added that the Bank of England and the Treasury are working closely with international partners to maintain consistency between global regulatory approaches. She made these comments as the US moves forward with new legislation that will make it clearer how payment providers issue and oversee stablecoins.

The UK's broader approach to digital assets has grown noticeably more open over the past year. In October, the Financial Conduct Authority (FCA) lifted its four-year ban on crypto exchange-traded notes (ETNs), allowing retail investors to gain indirect exposure to cryptocurrencies through regulated financial instruments. The FCA claims that the action will increase investor choice and solidify London's standing as an innovative global financial hub. 

While the Bank of England's commitment to matching the US in pace is viewed positively by the crypto sector, challenges remain around execution and timing. The success of these policies will depend on how effectively the UK coordinates between regulators and industry players to balance innovation with consumer protection and financial stability.