The Bank of England will control systemic stablecoins that are in widespread circulation.
The discussion papers released were part of an exploratory phase in building the new regime.
According to discussion documents issued by the two organizations on Monday, the Financial Conduct Authority (FCA) will manage the broader crypto industry, while the Bank of England (BOE) will control “systemic stablecoins” that are in widespread circulation and might disrupt the economy.
The suggestions followed the U.K. government’s publication last week of larger measures for controlling the crypto industry. Major jurisdictions, including the EU and Japan, have recently finalized policies in response to proposals from major tech companies to issue stablecoins.
Exploratory Phase
While the European Union’s Markets in Crypto Assets (MiCA) regulation aims to restrict potentially widespread stablecoins, a source familiar with the matter has stated that the BOE’s proposals would permit firms to issue payments-focused, fiat-backed stablecoins in the United Kingdom. However, under the suggestions, no current stablecoin meets the criteria.
In June, the United Kingdom successfully included stablecoins inside the scope of the country’s payments law, demonstrating the country’s intention to become a worldwide crypto center. Stablecoins backed by fiat currencies may anticipate legislative support early in 2024.
The BOE said that the discussion papers released on Monday were part of an exploratory phase in building the new regime, and that consultation on the final rules would follow once regulators gathered feedback from stakeholders on these ideas.
According to a document released with the discussion papers, the FCA and the central bank want to comment on final regulations by mid-2024 before enacting the stablecoin regimes by 2025. Moreover, according to a press release, the BOE aims to prioritize pound-backed stablecoins since it expects them to be extensively utilized for making transactions.