Bank of England outlines regulated stablecoins, tokenized deposits and digital pound plans

The Bank of England has announced a major push to modernize the United Kingdom’s financial infrastructure, outlining a vision for a future payment system that integrates regulated stablecoins, tokenized bank deposits, and a potential digital pound. Deputy Governor Sarah Breeden detailed the plans during a speech at the City Week 2026 conference in London, emphasizing the central bank’s focus on fostering competition and efficiency through new technologies.

The central bank will publish draft rules for systemic stablecoins next month, with the aim of finalizing the regulatory framework by the end of this year. Officials indicated that temporary limits on the total issuance of stablecoins may be introduced during an initial rollout phase to manage financial stability risks as the market develops. This cautious approach follows previous industry criticism of proposed rules, including a holding cap for individuals and requirements for issuers to maintain a portion of reserves in non-interest-bearing central bank deposits.

Breeden stated that the future retail payment system should be a “multi-money” ecosystem where consumers can choose between traditional bank deposits, tokenized...