The UK’s HM Treasury is set to require the Bank of England (BoE) to help foster innovation in payment systems and digital currencies, including the stablecoin ecosystem. This new obligation will take shape as a secondary objective within the country’s legal framework, sitting alongside the central bank’s primary mandate to maintain financial stability. The proposed rule will be introduced via an amendment to the Financial Services and Markets Bill, scheduled for debate in the House of Lords on September 7 and 9, 2026.
Under the statutory mandate, the BoE will also be tasked with submitting an annual report to Parliament detailing its progress in advancing payments innovation. Commenting on the draft legislation, City Minister Lucy Rigby stated that tokenization and distributed ledger technology (DLT) hold immense potential to transform the global financial market architecture. The decision to introduce these new rules comes in response to a glaring market imbalance: 99% of circulating stablecoins are denominated in US dollars, while sterling-backed tokens account for just a tiny fraction of the market that policymakers are eager to expand.
Easing Reserve Requirements
The proposed legislative amendment complements a series of pro-stablecoin regulatory moves introduced in the UK throughout the year. In June 2026, the BoE published regulatory guidance specifically for sterling-backed stablecoin issuance. The guidance eliminated individual holding limits, replacing them with a maximum issuance cap of 40 billion British pounds (around $52.9 billion) for any stablecoin asset deemed systemic.
The central bank also eased reserve requirements in non-interest-bearing deposits from the initial 30% baseline to support issuers’ commercial viability. WeFi CEO Maksym Sakharov emphasized that easing non-interest-bearing deposit reserve ratios was an essential first step needed to allow UK stablecoin businesses to operate profitably. Following this regulatory clarity, the registration window for prospective systemic sterling stablecoin issuers is slated to open before the end of the year.
Cross-Border Trials
Beyond sorting out domestic legislation, industry participants have already begun a series of technical trials. Since August 2026, a consortium of institutions participating in the Digital Pound Lab has been conducting simulation phases. Their primary goal is to assess interoperability between stablecoin platforms and a simulated digital pound system for facilitating cross-border payment transactions. The simulation phase kicked off just one month after UK and US authorities issued a joint statement regarding the authorized use of stablecoins across international financial networks.
These regulatory policies highlight the UK’s push to catch up with global rivals. The European Union implemented its MiCA regulatory framework back in June 2024, while US lawmakers rely on the GENIUS Act regulatory pillar. Once the Financial Services and Markets Bill amendment officially takes effect, the BoE faces one of its toughest challenges beyond technical rulemaking: attracting crypto issuers to mint sterling tokens amid dollar hegemony. Reported via Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
