Bank of England proceeds with plans for systemic stablecoin regime

• With the Financial Services and Markets Act 2023, the Bank of England can set up a systemic stablecoin regime.
• The government has stated that it will continue to assess its strategy with national regulators.

The Bank of England is planning to proceed with its proposal for a systemic stablecoin regime, as per a recent consultation response.

The consultation underlined that both the Bank of England and the Financial Conduct Authority will oversee systemic stablecoins. Respondents to the consultation received the proposal well. They also agreed upon extending the accountability framework to systemic stablecoins.

The consultation also explained the government’s support for the reform principle of “same risk, same regulatory outcome.” The government also recognized the need to set limits in order to mitigate financial and monetary stability risks posed by stablecoins.

Last year, the U.K. issued a series of consultations outlining how systemic stablecoins would be brought in under current rules and regulations. The stated goal of these actions was to return customer funds and implement measures for smooth operations, a major concern.

The government has stated that it will continue to assess its strategy with the national regulators.

The U.K. enacted the Financial Services and Markets Act 2023 into law in June. It also provided the central bank the authority to set up a systemic stablecoin regime.

The bill came to fore in July 2022. It provides authorities with greater control over the financial sector, including the crypto sector. While the law was being considered in Parliament, amendments were made to treat all crypto activities as a regulated activity and to control cryptocurrency advertisements. The bill also includes stablecoins for the purview of payment rules.

Crypto crimes remain a concern for U.K. authorities

In other news, the country’s National Crime Agency (NCA) is now expanding its digital assets investigation team. It recently put out a notification to hire four senior investigators for its Complex Financial Crime Team to work on crypto-related crimes.

The job entails investigating significant crypto scams, money laundering and other crypto-based crimes executed by organized crime groups.