For years, the Bank of England has played it safe with stablecoins. Cautious rules, tight caps, endless consultations. That’s about to change.
HM Treasury confirmed on August 27, 2026, that it’s giving the Bank a brand-new job: actively supporting innovation in stablecoins and digital payments. Not just tolerate it. Not just regulate it from a distance. Support it.
What’s actually changing?
The government is adding a “secondary objective” to the Bank’s mandate through an amendment to the Financial Services and Markets Bill. Financial stability stays the top priority, that’s not going anywhere, but innovation in payments and digital money now becomes a real, legal responsibility sitting right underneath it.
City Minister Lucy Rigby put it plainly: financial stability will always come first, but this new objective pushes the Bank to keep driving innovation so the UK stays a serious player in global finance.
The Bank will also have to report to Parliament every year on how it’s doing. That’s the part that matters most. It turns “we support innovation” from a talking point into something the Bank actually has to show receipts for.
The bill heads back to the House of Lords for debate on September 7 and 9.
This isn’t happening in a vacuum. Crypto firms have spent the last couple of years complaining that the BoE was too conservative, especially after it floated ownership caps on stablecoins that the industry hated. The Bank walked that back in June, swapping ownership limits for a flat £40 billion issuance cap per systemic stablecoin instead, and easing reserve requirements at the same time.
There’s also a bigger race happening. The US passed the GENIUS Act in July 2025, giving dollar-backed stablecoins a clear federal framework. Since then, USDT and USDC have taken over 80% of a stablecoin market now worth roughly $308 billion. A pound-denominated stablecoin barely exists. The UK is essentially saying: we’re not sitting this one out.
A “secondary objective” sounds like bureaucratic wallpaper, but it’s not. It shifts the Bank’s default posture. Instead of gatekeeping first and asking questions later, the incentive structure now leans toward getting proposals through instead of parking them in review.
For anyone building sterling stablecoins, tokenized deposits, or payment infrastructure in the UK, this is the clearest signal yet that the regulatory wind is turning. Whether the Bank moves as fast as the market wants is the next thing to watch, especially once the annual reporting requirement kicks in and there’s an actual paper trail to judge it by.
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