(27 August 2026 – United Kingdom) The UK Government is introducing a secondary objective for the Bank of England to support innovation in payment systems and digital money, including stablecoins.
The mandate, proposed by HM Treasury, sits alongside the Bank’s primary financial stability remit and is intended to ensure regulation keeps pace with developments in payments technology.
The move follows a significant policy reversal by the Bank, which had initially proposed strict caps on stablecoin holdings and heavy capital requirements, plans that drew widespread industry criticism for stifling innovation. The Bank subsequently scrapped the initial low cap, replacing it with a £40bn limit on total issuance per stablecoin, and relaxed its backing asset rules, raising the share that can be held in short-term government debt from 60 percent to 70 percent.
Under the new framework, the Bank will be required to report annually to parliament on its progress against the innovation objective. City Minister Lucy Rigby said developments including tokenisation had the potential to transform financial markets, adding: “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, ensuring that the UK remains a global leader in financial services.”