UK Gives Bank of England New Stablecoin Innovation Mandate

Lucy Rigby Backs New Bank of England Mandate for Digital Finance

The U.K. is moving to give the Bank of England a formal role in encouraging innovation across stablecoins, tokenized finance and digital payment infrastructure, as policymakers seek to keep regulation aligned with rapid technological change.

Under the proposal, the Bank would receive a secondary objective to support innovation in systemic payment systems. The mandate would cover emerging technologies and digital settlement assets, including stablecoins, while remaining subordinate to the Bank’s core responsibility for financial stability.

City Minister Lucy Rigby said technologies such as tokenization and distributed ledger technology could reshape financial markets globally.

“Whilst 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,” Rigby said.

Stablecoins Move Further Into the UK Regulatory Framework

The change is significant for digital assets because it extends the Bank’s existing innovation remit directly into payment systems.

The Bank already has a secondary innovation objective when overseeing central counterparties and central securities depositories. The government now wants to apply the same approach to systemic payment infrastructure, including systems that rely on digital settlement assets.

That could give the central bank a clearer mandate to consider how regulation affects stablecoin issuers, tokenized payment networks and blockchain-based settlement models.

The government said the aim is to create conditions where new technologies can develop safely while contributing to economic growth.

Deputy Governor for Financial Stability Sarah Breeden said the Bank welcomed the proposal, adding that it would “further boost our work to support innovation in financial services without compromising on financial stability.”

Tokenization Gains Policy Support

The proposal fits into a broader UK effort to modernize payments and encourage digital finance while keeping regulated infrastructure resilient.

The Bank would be required to report annually to Parliament on how it is advancing the innovation objective and to create a formal mechanism to measure progress.

The government plans to implement the change through amendments to the Financial Services and Markets Bill, which is scheduled for debate in the House of Lords on Sept. 7 and Sept. 9.

For the crypto industry, the shift is notable because it places stablecoins and tokenized settlement within the same policy framework as other critical payment systems.

The message from Westminster is increasingly clear: digital assets are being treated less as a parallel financial system and more as infrastructure that regulators expect to integrate into the existing one.