FCA & BoE Open Stablecoin Consultation

Image © FCA

The Bank of England and FCA are exploring "making payments faster and cheaper" through the use of stablecoins as a new consultation on the emerging industry is launched.

The two regulators say they are now looking for feedback on a joint approach to regulating stablecoins. The Bank of England says stablecoins are a new type of digital asset that can maintain a
stable value and be used for future retail payments.

"The consultation is welcome and marks another step forward for the crypto payments industry as a whole," says WhereGamble.com, a global crypto payments specialist.

The Bank of England and FCA have launched two separate discussion papers on the matter, while the Prudential Regulation Authority (PRA) has issued its own guidance.

With three different authorities issuing regulations for crypto payment firms, concerns over the sustainability or effectiveness of a dislocated regulatory regime in the UK might grow.

The FCA, Bank of England and PRA have also published a cross-authority roadmap paper on innovation in payments and money, but this does not make for a single regulator.

Nevertheless, Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, says authorities are offering the required support:

"Stablecoins can enhance digital retail payments in the UK. With this comes the need to make sure there is robust and clear regulation in place. Our proposals aim to support safe innovation so that firms can understand the risks they need to manage and ensure that the public can be confident in all forms of digital money and payments."

The feedback from the public and industry should be delivered by February 06, 2024.

"We look forward to continuing our engagement with Government, our partners and the wider crypto industry as we move forward with the Government’s first phase in developing the UK’s crypto regulation regime and beyond," says Sheldon Mills, Executive Director, Consumers and Competition, at the FCA.