Bank of England “Well Advanced” in Stablecoin Regulation (BOE)
According to the Bank of England’s (BOE’s) Sasha Mills the Bank is well advanced in developing a regulatory framework for systemic stablecoins, following the powers granted by the Financial Services and Markets Act 2023. This framework aims to set robust, forward-looking standards for stablecoins that could be widely used for everyday payments or for settling tokenized core transactions. The Bank’s approach prioritizes financial stability and trust, drawing on international standards and lessons from other jurisdictions such as the EU’s MiCA and Singapore’s stablecoin regulations. Mills notes that the Bank will allow systemic stablecoin issuers to hold a portion of their backing assets in high-quality liquid assets, but also stresses that some assets should be held in central bank deposits, positioning the Bank as “the banker” to stablecoin issuers and enhancing trust. The Bank is listening to industry feedback and plans a consultation paper later this year to further set out its regulatory proposals for stablecoins, emphasizing flexibility, proportionate requirements, and a commitment to enabling responsible innovation without jeopardizing monetary confidence or market stability. [Source: BOE]
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I produce a monthly digest of digital fiat currency (DFC) developments exclusively for the official sector (e.g., central banks, ministries of finance and international financial institution (e.g., the BIS, IMF, OECD, World Bank)) plus academics and firms that are active in the DFC space (commercial banks, technology providers, consultants, etc.). (DFCs include central bank digital currency (CBDC), stablecoins and tokenized deposits.) It goes out via email on the first business day of every month, and if you’re interested in being on the mailing list, please email me at john@kiffmeister.com.