Bank of England Determined to Create a Systemic Stablecoin Framework

The Financial Services and Markets Act 2023, which provided the Bank of England (BoE) authority to establish a systemic stablecoin framework, was just passed into law in the United Kingdom.

Bank of England Determined to Create a Systemic Stablecoin Framework

A consultation answer released on Monday indicated that the BoE intends to continue with its plans for a systemic stablecoin regime. The consultation specified that systemic stablecoins would be under the Financial Conduct Authority‘s (FCA) and BoE’s supervision, which was welcomed by respondents. Both respondents and the government agreed that systemic stablecoins should be included in the accountability framework, which assesses whether the regulators’ strategy is future-proof.

As for views concerning FMI SAR (the regime) primacy in cases of insolvency of future systemic payments entities, this was widely well received,

The Consultation Document

The Government Is Committed To Working With Regulators

Last year, the U.K. published a series of consultations outlining how systemic stablecoins would be brought under current regulations with a new goal of restoring client funds in addition to the goal of ensuring operations continued, which frightened some respondents.

Few others noted concerns that adding a new objective for returning customer funds to all systemically important payments entities may lead to situations where this was prioritized over ensuring continuity of service to mitigate acute stability risks,

The Document

The administration declared that it would keep reviewing its strategy with regulators.