Bank of England Targets End-2026 for Stablecoin Rules to Match U.S. Bond-Backed Standards

News

  • BOE plans to align its stablecoin framework with U.S. bond-backed regulatory standards.
  • The consultation on UK stablecoin rules will begin on November 10, 2025.
  • The move aims to attract issuers, strengthen digital payments, and prevent regulatory gaps.

The Bank of England (BOE) has set an end-2026 target for rolling out new stablecoin regulations as it moves to match the pace of U.S. policymakers. The central bank aims to establish a framework that aligns with Washington’s bond-backed model for digital assets. Officials confirmed that a consultation paper will be released on November 10, outlining the structure of the UK’s regulatory plan.

The upcoming rules are designed to manage risks tied to the growing use of stablecoins in the financial system. These digital currencies, which are pegged to traditional money such as the U.S. dollar or the British pound, are gaining attention among global regulators. The BOE’s decision follows discussions at the International Monetary Fund (IMF) and World Bank meetings in Washington, where stablecoins were a major focus for financial leaders.

Plan Aims to Align with U.S. Bond-Backing Rules

Sources familiar with the BOE’s plans said the framework will require stablecoin issuers to hold assets similar to those mandated under U.S. rules. These include government debt or short-term bonds maturing within three months. By mirroring the U.S. model, the BOE seeks to prevent regulatory gaps and promote confidence in digital payment systems.

Officials also plan to allow a portion of the underlying assets to earn interest. The move is expected to attract issuers to the UK market and could increase demand for government securities. The approach reflects a similar expectation in the U.S., where the Trump administration anticipates higher Treasury demand through its digital asset policy known as the Genius Act.

Pressure Mounts to Maintain Competitive Pace

According to individuals briefed on internal discussions, the UK Treasury has urged the BOE to act swiftly to avoid falling behind other jurisdictions. Industry experts have warned that delays could limit the country’s influence in shaping the future of digital payments.

The Financial Stability Board (FSB), chaired by BOE Governor Andrew Bailey, recently cautioned that inconsistent global rules risk regulatory arbitrage and potential financial disruptions. The FSB’s warning has added urgency to the BOE’s efforts to finalize its framework.

At recent global meetings, economists noted that stablecoins could reshape cross-border payments by offering lower costs and faster settlement times. The majority of existing stablecoins remain tied to the U.S. dollar, giving American markets a dominant position. The BOE’s move to align with the U.S. model aims to preserve the UK’s competitiveness in this evolving financial landscape.

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