Following the UK's passage of the Financial Services and Markets Act 2023, which grants regulatory powers to the Bank of England (BoE) over stablecoins, the central bank moves forward with plans for a systemic stablecoin regime.
According to a report by CoinDesk, The Bank of England (BoE) is pressing ahead with its systemic stablecoin regime plans, as shown in a recent consultation response. The Financial Services and Markets Act 2023, which was recently enacted in the UK, provides the BoE with the authority to establish a systemic stablecoin regime.
The consultation revealed that the BoE and the Financial Conduct Authority (FCA) would oversee systemic stablecoins, a proposition that both respondents and the government endorsed. The accountability framework, which assesses whether the regulators' approach is future-proof, would be extended to systemic stablecoins per respondents' and the government's recommendations.
The consultation document stated that the proposed FMI SAR (the regime) primacy in cases of insolvency of future systemic payments entities was widely well received. In response to concerns over the prioritization of customer fund returns at the expense of ensuring service continuity for systemically essential payment entities, the government pledged to continue collaborating with regulators to review its approach.
CoinDesk reached out to the Bank of England for comment on their plans for the systemic stablecoin regime.
