Bank of England Races to Match US on Stablecoin Regulations: A Step Toward Safer Digital Finance

The Bank of England (BoE) has revealed plans to accelerate the development of a regulatory framework for stablecoins. This move is intended to align with the efforts of the United States and reinforce the UK’s position within the global digital asset landscape.

According to Reuters, Sarah Breeden, the BoE’s Deputy Governor, confirmed that the central bank is finalizing its strategy for overseeing stablecoins — digital currencies tied to traditional money — particularly those used for making payments and conducting financial transactions.

This development follows growing pressure on UK financial regulators to introduce clearer crypto rules, as major regions like the US and the EU have already established their own regulatory systems.

Stablecoin operators will be divided into two groups under the new framework: small-scale and systemic.
Systemic operators are those whose widespread use in payments could significantly affect the financial system.

The Financial Conduct Authority (FCA) will regulate smaller or non-systemic operators, while the BoE will oversee larger stablecoins that focus on payment services.
This division is designed to maintain financial stability and offer better consumer protection.

At a policy event in London, Deputy Governor Sarah Breeden stated:

“We are progressing as quickly as the US to create a stablecoin regulatory system that protects consumers while supporting innovation.”


 

She also highlighted that the Bank of England and the UK Treasury are working with international partners to ensure consistent crypto regulations worldwide, in line with global standards set by other nations.

The UK is increasingly focusing on digital assets and has taken significant steps to encourage innovation in the crypto and fintech sectors.
In October 2024, the FCA lifted its four-year ban on crypto exchange-traded notes (ETNs), enabling retail investors to access cryptocurrencies through regulated financial products.

Regulators believe this move will broaden investment opportunities and help London remain a top fintech hub globally.

While the BoE’s commitment to match the US’s regulatory pace has been welcomed by the crypto community, experts emphasize that successful implementation and collaboration will be essential.
The effectiveness of the framework will depend on how well UK regulators and industry leaders can work together to balance innovation, consumer protection, and market stability.

⚠️ Disclaimer 
Cryptocurrencies and digital assets are not regulated in the UK and involve high market risks.
This article is for informational purposes only and should not be viewed as financial or investment advice. Fixkhabar (or its affiliates) will not be held responsible for any financial losses that may occur from decisions based on this content.