The Bank of England Is Being Handed a Legal Duty to Foster Stablecoins

The Bank of England will be given a legal duty to promote innovation in payments and digital money — the clearest signal yet that ministers want it moving faster on stablecoins.

The Treasury said it would create a statutory "secondary objective" covering payment systems and digital money, subordinate to the Bank's primary responsibility for financial stability. It arrives as an amendment to the Financial Services and Markets Bill, due before the House of Lords in September, and will require the Bank to report to parliament annually on its progress.

The government's framing

"Whilst financial stability will always remain the Bank's primary objective, this secondary objective will support the Bank to continue to drive innovation in payments and digital finance, ensuring that the UK remains a global leader in financial services," City Minister Lucy Rigby said, adding that tokenisation and distributed ledger technology could transform financial markets.

The change extends an approach already used for central counterparties and central securities depositories — the institutions that clear, hold and settle financial assets.

What a secondary objective actually does

The objective follows sustained criticism from crypto firms, which have accused the Bank of an overly conservative approach to digital assets.

On its own, it changes no rule. What it changes is the Bank's answer when asked why a proposal was refused: a supervisor with a statutory innovation duty and an annual reporting obligation has to justify caution rather than simply exercise it.

That is a meaningful shift in the burden of argument, and it is the reason the industry lobbied for it. It is also why the primary objective was left explicitly intact — the Bank retains the ability to say no, but now has to explain itself when it does.