UK’s Central Bank Forges Ahead With Plans for a Systemic Stablecoin Regime

The consultation set out that systemic stablecoins would be supervised by both the BoE and Financial Conduct Authority (FCA), which was welcomed by respondents. Respondents and the government also supported extending the accountability framework (which evaluates whether the regulators approach is future proof) to systemic stablecoins.

“As for views concerning FMI SAR (the regime) primacy in cases of insolvency of future systemic payments entities, this was widely well received,” the consultation document said.

The U.K. released a series of consultations last year detailing that systemic stablecoin’s would be brought under existing regulations with a new objective of returning customer funds alongside the objective of making sure operations continue, something which some respondents worried about.

“Few others noted concerns that adding a new objective for returning customer funds to all systemically important payments entities may lead to situations where this was prioritised over ensuring continuity of service to mitigate acute stability risks,” the document said. The government said that it will continue to work with regulators to review its approach.

CoinDesk reached out to the Bank of England for comment.