The Bank of England published discussion paper 'Regulatory regime for systemic payment systems using stablecoins and related service providers', which sets out the Bank's proposed regulatory framework for systemic payment systems using stablecoins and related service providers.
The paper focuses on sterling-denominated stablecoins because these are "the most likely digital settlement assets to be used widely for payments".
Part one outlines the central bank's role in ensuring the safety of money and payments and the scope of the regime, while Part two explains the proposed requirements of the regime.
The paper is published alongside a discussion paper from the Financial Conduct Authority on its regulatory approach to stablecoin issuers and custodians, a letter from the Prudential Regulation Authority to bank Chief Executive Officers on innovations in the use by banks of deposits, e-money and stablecoins, and a roadmap paper, which sets out how the various regimes interact together.
With these joint publications, regulators aim to "provide clarity as to which regulatory regime each form of money and money-like instrument falls under, with regulatory boundaries between each regime clearly established."
The deadline for comments on the Bank of England's discussion paper is 6 February 2024.