Bank of England Stablecoin Regulation Consultation in November
Background: UK Moves Toward Stablecoin Regulation
The Bank of England is preparing to launch a consultation on stablecoin regulation in November, with a goal to establish new rules by the end of 2026. This initiative, reported by Cointelegraph and citing anonymous sources via Bloomberg, is part of the UK’s effort to align its approach with stablecoin oversight measures recently advanced in the United States.
The consultation, reportedly set to open on November 10, will likely propose a regulatory framework modeled after US standards. This framework may require stablecoin issuers to hold government bonds or bills with specific maturities, mirroring requirements for liquidity and stability implemented in the US. The move comes after pressure from the UK Treasury, which has called on the Bank of England to accelerate regulatory action to ensure the UK remains competitive in the global digital asset marketplace.
Industry Response and International Alignment
The UK-based crypto trade association CryptoUK has welcomed the Bank of England’s plans. In a statement shared with Cointelegraph, a CryptoUK spokesperson emphasized that synchronization with US policy would “provide more confidence to the industry” and ensure that the UK “keeps pace with its global peers.” The group further noted that the British crypto sector is already seeing positive effects from regulatory advancements in the US, referencing the US GENIUS Act’s push to integrate stablecoins into mainstream finance.
“Ultimately, it is important that the UK keeps pace with the US and other jurisdictions – the crypto industry is truly global and that means the competitive landscape shifts quickly for our members,” the spokesperson added, as quoted by Cointelegraph.
Bank of England Governor Andrew Bailey has acknowledged the growing role of stablecoins. In an October 1 opinion piece for the Financial Times, Bailey stated that stablecoins could help reduce the United Kingdom’s reliance on commercial banks, signalling a notable shift in sentiment towards digital assets.
Market Reaction and Regulatory Trend
The forthcoming Bank of England stablecoin regulation is part of a wider push to create a more supportive and clear legal framework for digital assets in the UK. This comes amid several recent regulatory changes. On October 9, the Financial Conduct Authority (FCA) lifted its four-year ban on crypto exchange-traded notes (ETNs), which has enabled UK investors to access digital assets through regulated venues like the London Stock Exchange. Shortly afterward, BlackRock introduced its Bitcoin exchange-traded product (ETP) to the UK market.
In addition, the FCA recently authorized asset managers to use blockchain technology for fund tokenization. This step aligns with the UK government’s goal of transforming the country into a center for tokenized finance and digital asset innovation.
What’s Next for UK Digital Assets?
If implemented, the Bank of England stablecoin regulation will bring the UK’s oversight framework in line with evolving global standards, particularly those in the US. By adopting investor protection measures and asset backing requirements similar to those across the Atlantic, officials aim to attract more institutional capital to the sector and strengthen the legitimacy of digital tokens. The regulatory momentum, coupled with recent policy shifts by financial authorities, indicates the UK’s ambition to be at the forefront of regulated digital finance.
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Sources: Cointelegraph
