UK Wants Central Bank to Support Stablecoin Innovation

England wants its central bank to support innovation in stablecoins and other digital money.

The U.K. Treasury announced Thursday (Aug. 27) that it had set a new objective for the Bank of England to make sure its regulatory framework fosters the appropriate conditions for things like tokenization and distributed ledger technology (DLT) to develop safely.

“Developments in digital payments technology, including tokenization and DLT, have the potential to transform financial markets across the globe,” City Minister Lucy Rigby said in a news release.

“While financial stability will always remain the Bank’s primary objective, this secondary objective will support the Bank to continue to drive innovation in payments and digital finance, ensuring that the UK remains a global leader in financial services.”

The release said the Bank of England (BoE) will provide yearly reports on this objective, to keep in step with technological changes.

The treasury added that the Bank of England “already has a secondary objective to facilitate innovation when regulating central counterparties and central securities depositories.”

“That approach is being extended to its regulation of payment systems, including those using digital settlement assets, such as stablecoins,” the release said.

As covered here Wednesday (Aug. 26), the BoE has been criticized by the crypto industry, which argues the central bank has been too conservative in its approach to digital assets. This new objective comes at a time when traditional banks and asset managers are moving deeper into the use of blockchain technology.

In the last few months, the bank has issued planned stablecoin rules, done away with plans for ownership limits on U.K. stablecoins after crypto executives said that would hamper growth, and reduced the proportion of assets backing stablecoins that must be held in zero-interest accounts at the central bank.

Meanwhile, PYMNTS wrote earlier this week about efforts by banks and FinTechs to test how blockchain technology can help them move money and win over corporate CFOs.

At the same time, CFOs are hesitant when it comes to digital assets. “Waiting for Certainty: Why Most CFOs Are Holding Back on Crypto and Stablecoins,” the March installment of PYMNTS Intelligence’s 2026 Certainty Project, illustrates that caution, with just 13% of firms using stablecoins and 5% adopting other cryptocurrencies.

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