Bank of England Handed New Legal Duty to Foster Stablecoin Innovation

In brief

• The Treasury said Wednesday it will give the Bank of England a secondary statutory objective to support innovation in payments and digital money.
• The duty arrives via an amendment to the Financial Services and Markets Bill, which reaches the House of Lords next month.
• The Bank will have to report to parliament annually on how it is advancing the objective.

The Bank of England is to be handed a legal duty to promote innovation in payments and digital money, in the clearest signal yet that ministers want the central bank to move faster on stablecoins.

The Treasury said Wednesday it would create a statutory "secondary objective" covering payment systems and digital money, subordinate to the Bank's primary responsibility for financial stability. It arrives as an amendment to the Financial Services and Markets Bill, due before the House of Lords in September, and will require the Bank to report to parliament each year on its progress.

"Whilst financial stability will always remain the Bank's primary objective, this secondary objective will support the Bank to continue to drive innovation in payments and digital finance, ensuring that the UK remains a global leader in financial services," City Minister Lucy Rigby said in a statement, adding that tokenization and distributed ledger technology could transform financial markets.