The Bank of England (BoE) aims to establish a stablecoin regulatory framework by the end of 2026 in order to keep pace with other jurisdictions that have opened their financial systems to these digital assets. According to a Bloomberg report citing anonymous sources, the central bank plans to launch a consultation process on the matter, expected to begin on November 10.
The bank’s broader goal is to match the pace of the United States, which passed its stablecoin legislation earlier this year. Meanwhile, the anonymous sources revealed that the BoE is leaning toward a regulatory approach that would require stablecoins to be backed by bonds or government debt. Such a move would create natural demand for UK gilts and treasury bills.
Until recently, the BoE had been under pressure from the UK Treasury, which was reportedly frustrated with the central bank’s slow progress on the issue. Officials argued that the BoE’s ultra-cautious approach had left the UK lagging behind other jurisdictions. Critics suggested that the bank’s slow pace gave the U.S. a first-mover advantage—something officials might later regret.
However, with the BoE now signaling its readiness to move forward, industry participants are calling for an acceleration of the process. Katharine Braddick, Barclays’ head of strategic policy and a former Treasury official, said the UK must pick up speed if it wants to compete with the U.S.
“We’ll probably see a faster period of policy and regulatory development, as well as strategic policy work, particularly on the UK side,” Braddick said. “The speed, ambition, and scope of what the U.S. is trying to achieve really presents a challenge for us.”
Although the BoE has taken a relatively soft stance, Governor Andrew Bailey remains concerned that what he sees as “significant gaps and inconsistencies” among different stablecoin regimes could pose a threat to financial stability.
