UK Grants Bank of England New Stablecoin Innovation Mandate

The United Kingdom government has announced plans to grant the Bank of England a new secondary objective focused on fostering innovation in payment systems, explicitly including those that use stablecoins and other digital settlement assets. The move, revealed by HM Treasury on August 27, 2026, aims to ensure the UK's regulatory framework keeps pace with technological change while maintaining financial stability as the central bank's primary responsibility.

Under the proposal, the Bank of England would be required to report annually to Parliament on its progress in advancing this payments innovation objective. The government intends to formalize the new mandate through amendments to the Financial Services and Markets Bill, which is scheduled for debate in the House of Lords on September 7 and 9, 2026. City Minister Lucy Rigby stated that the objective would support the Bank in driving innovation in payments and digital finance, helping the UK remain a global leader in financial services. She highlighted tokenization and distributed ledger technology as developments with the potential to transform global financial markets.

The announcement extends the Bank's existing secondary...