Bank of England Opens Door to Systemic Stablecoins

The Bank of England is preparing to open applications for stablecoin issuers later this year, as UK regulators move closer to implementing a formal framework for digital payment assets.

Speaking during the Financial Times Digital Asset Summit, Sasha Mills, Executive Director of Financial Market Infrastructure at the Bank of England, described stablecoins as “a new form of money,” highlighting how seriously the central bank is approaching the sector as digital assets become increasingly integrated into mainstream financial systems.

According to Mills, the Bank of England expects to begin accepting applications by the end of 2026 from companies seeking to issue what regulators classify as “systemic stablecoins,” digital currencies that could become widely used in payments across the UK economy.

UK Regulators Move Closer to Stablecoin Framework

The UK’s developing regulatory model divides oversight responsibilities between the Bank of England and the Financial Conduct Authority.

Under the proposed structure, the Bank of England would supervise systemic stablecoins that could pose broader risks to financial stability due to large-scale adoption in retail or corporate payments. Meanwhile, smaller or non-systemic stablecoins would fall under the oversight of the Financial Conduct Authority.

Mills emphasized that regulators are not favoring one digital payment model over another as the market evolves. Discussions in the industry have increasingly focused on the role of stablecoins compared to alternatives such as tokenized bank deposits and electronic money systems.

According to Mills, regulators are still assessing which technologies and structures are best suited for different financial use cases.

Stablecoins Seen as Part of the Future Financial System

The Bank of England’s approach reflects a broader shift in how central banks are beginning to view stablecoins, not simply as crypto-related assets, but as emerging payment infrastructure with characteristics similar to traditional forms of money.

Mills noted that stablecoins must meet the same standards of robustness, interoperability, and reliability expected from existing financial systems. She added that users should eventually be able to move seamlessly between stablecoins, tokenized deposits, and other forms of digital money.

The comments suggest the UK is moving toward a more integrated model in which regulated digital assets coexist alongside conventional financial infrastructure rather than operating separately from it.

UK Pushes Forward as Global Stablecoin Competition Intensifies

The UK’s stablecoin framework is advancing at a time when regulators worldwide are accelerating efforts to establish oversight for digital payment assets.

While most global stablecoins remain denominated in US dollars, UK officials continue to argue there is room for pound-backed digital currencies within the country’s financial system.

Matthew Long, Director for Payments and Digital Assets at the Financial Conduct Authority, said regulators are working to support firms developing compliant stablecoin models while ensuring they meet required standards.

The FCA has already approved several firms to participate in a regulatory sandbox designed to help shape the country’s stablecoin rules before broader implementation.

Mills also noted that many existing dollar-backed stablecoins were launched before the introduction of newer US legislative frameworks, including the recently discussed GENIUS Act, which is expected to reshape stablecoin issuance standards in the United States.

According to her remarks, the UK’s framework may ultimately appear stricter than some international models because regulators are treating stablecoins as a direct component of the monetary system rather than simply another category of digital assets.