Bank of England Continues Plans for Systemic Stablecoin Regime

The U.K. Implements Systemic Stablecoin Regime

The U.K. has passed the Financial Services and Markets Act 2023, granting the Bank of England (BoE) the authority to establish a systemic stablecoin regime. In response, the BoE plans to move forward with its plans for this regime, according to a consultation response. The response also revealed that systemic stablecoins would be supervised by both the BoE and the Financial Conduct Authority (FCA), a proposition that was well received by respondents. The consultation document also mentioned the extension of the accountability framework to include systemic stablecoins. Some concerns were raised by respondents regarding the prioritization of returning customer funds over ensuring continuity of service, but the government has stated its commitment to working with regulators to evaluate its approach.

Key Points:

The U.K. has implemented the Financial Services and Markets Act 2023, granting the BoE powers to establish a systemic stablecoin regime.
The BoE plans to move forward with the regime, as indicated by a consultation response.
Systemic stablecoins will be supervised by both the BoE and the FCA.
The extension of the accountability framework to include systemic stablecoins was supported by respondents and the government.
Concerns were raised about prioritizing returning customer funds over ensuring continuity of service.

Hot Take:

The U.K.’s implementation of a systemic stablecoin regime demonstrates its commitment to regulating the cryptocurrency industry. By involving both the BoE and the FCA in the supervision of systemic stablecoins, the U.K. aims to ensure the stability and accountability of these digital assets. However, concerns about the potential impact on customer service continuity need to be carefully addressed to mitigate any stability risks. Overall, this move reflects the U.K.’s proactive approach to adapting its regulatory framework to the evolving landscape of cryptocurrencies.