WeFi

Stablecoin

Kingdom

Bank

<p style="text-align: justify">The United Kingdom government is preparing to introduce a secondary mandate for the Bank of England, providing the central bank with a formal objective to support innovation in payment systems and digital money, particularly with regard to stablecoins. HM Treasury detailed the proposal on Thursday, noting that financial stability will continue to serve as the Bank’s primary aim.</p>
<h2 id="new-objectives-for-central-bank">New objectives for central bank</h2>
<p style="text-align: justify">The proposal outlines an expansion of the Bank of England’s responsibilities beyond its current focus, aiming to foster innovation in digital payments. The new objective will cover payment systems using digital settlement assets, such as stablecoins.</p>
<p style="text-align: justify">While the central bank’s main duty will remain maintaining financial stability, the reform will formally require annual reporting to Parliament on progress towards advancing payment innovation and the adoption of digital money technologies.</p>
<blockquote>
 <p>Developments in digital payments technology, including tokenization and distributed ledger technology, have the potential to transform financial markets across the globe, said City Minister Lucy Rigby.</p>
</blockquote>
<p style="text-align: justify">The government plans to deliver this new mandate by amending the Financial Services and Markets Bill. Further discussions on the bill are scheduled in the House of Lords on September 7 and 9.</p>
<h2 id="focus-on-stablecoins-and-regulatory-developments">Focus on stablecoins and regulatory developments</h2>
<p style="text-align: justify">The initiative follows a period of significant regulatory activity around stablecoins, which are crypto assets designed to maintain a stable value by tracking fiat currencies such as the US dollar or pound sterling.</p>
<p style="text-align: justify">Recent efforts, including payment system experiments and coordination with U.S. authorities, aim to create a clear regulatory environment for stablecoins. As part of these changes, the Bank of England finalized new rules in June for systemic stablecoin issuers, including requirements for backing assets.</p>
<p style="text-align: justify">Maksym Sakharov, co-founder and CEO of on-chain banking infrastructure provider WeFi, observed that these annual reporting obligations could bring greater transparency and scrutiny to the application of stablecoin regulations.</p>
<blockquote>
 <p>The objective is secondary to financial stability, so it overrides nothing, but the bank will have to publish an annual account of its innovation efforts in payments and digital money. This could put greater public focus on stablecoin rules, Sakharov commented.</p>
</blockquote>
<p style="text-align: justify">He pointed to existing requirements for systemic stablecoin issuers to hold at least 30% of their reserves in non-interest-bearing deposits at the central bank, highlighting the possible impact on the commercial viability of stablecoin businesses.</p>
<p style="text-align: justify;background: linear-gradient(135deg,#ffffff 0%,#fffdf9 100%);border:1px solid #f1e4d8;border-left:4px solid #F69434;padding:14px 16px;border-radius:12px;color:#1e293b;font-size:15px;line-height:1.7">Mini dictionary: WeFi is a company providing on-chain banking infrastructure, enabling traditional financial services to operate on blockchain networks.</p>
<table style="border:1px solid #f1e4d8;padding:8px">
 <thead>
  <tr>
   <th style="border:1px solid #f1e4d8;padding:8px">Requirement</th>
   <th style="border:1px solid #f1e4d8;padding:8px">Systemic Stablecoin Issuers</th>
  </tr>
 </thead>
 <tbody>
  <tr>
   <td style="border:1px solid #f1e4d8;padding:8px">Deposits at BoE</td>
   <td style="border:1px solid #f1e4d8;padding:8px">At least 30% non-interest-bearing</td>
  </tr>
  <tr>
   <td style="border:1px solid #f1e4d8;padding:8px">Issuance cap (temporary)</td>
   <td style="border:1px solid #f1e4d8;padding:8px">40 billion pounds ($52.9 billion) per stablecoin</td>
  </tr>
 </tbody>
</table>
<h2 id="ongoing-tests-and-international-cooperation">Ongoing tests and international cooperation</h2>
<p style="text-align: justify">In August, a group in the Bank of England’s Digital Pound Lab launched tests to determine whether a stablecoin and a simulated digital British pound could be interoperable in facilitating cross-border payments. The experiments do not involve real customer funds or transactions.</p>
<p style="text-align: justify">The Bank of England had earlier dropped original plans to cap individual stablecoin holdings at 20,000 British pounds and 10 million pounds per business. Instead, a temporary issuance cap of 40 billion pounds per systemic stablecoin has been adopted.</p>
<p style="text-align: justify">In July, the UK and US released a joint statement pledging to enable the use of stablecoins in cross-border finance and calling for regulatory alignment between the nations.</p>
<p>The post <a href="https://en.coin-turk.com/uk-to-give-bank-of-england-new-mandate-supporting-stablecoin-payments/" rel="noopener noreferrer nofollow">UK to give Bank of England new mandate supporting stablecoin payments</a> appeared first on <a href="https://en.coin-turk.com" rel="noopener noreferrer nofollow">COINTURK NEWS</a>.</p>

UK to give Bank of England new mandate supporting stablecoin payments

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