“The proposed regulatory approach put forward by the FCA and the Bank looks to harness the potential benefits stablecoins could provide to UK consumers and retailers, in particular by making payments faster and cheaper,” the statement reads. “The proposals to regulate stablecoins aim to protect consumers, prevent money laundering with a robust set of rules and to safeguard financial stability.”
The discussion paper outlines how the BOE intends to oversee systemic stablecoins, mitigating potential threats to financial stability. Additionally, the Bank will assume regulatory authority over stablecoin issuers and wallet providers. On the other hand, the FCA will take on the responsibility of overseeing stablecoin issuance.
Meanwhile, this collaborative effort between the BOE and FCA aligns with a related update from the UK Treasury focusing on stablecoin regulation.
Sheldon Mills, an Executive Director at the FCA, noted that stablecoins hold significant promise for enhancing payment systems. As such, soliciting input from stakeholders regarding their regulation is deemed crucial.
Sarah Breeden, a Deputy Governor at the BOE, emphasized that stablecoins have the potential to bolster digital retail payments in the UK.
Breeden continued that the proposals are designed to foster secure innovation, providing firms with clear guidance on risk management and instilling public confidence in all facets of digital currency and payments.