UK Mandates BoE on Stablecoins
The UK is actively advancing a digital pound, with the Bank of England driving stablecoin and CBDC innovation through mandates and live sandbox testing.
The UK government is set to give the Bank of England a formal mandate to support stablecoins and digital money, per Cointelegraph and other outlets. The mandate lands on top of the Bank's finalised systemic-stablecoin regime from June: issuers must hold 30% of backing assets as unremunerated central-bank deposits — reduced from a proposed 40% after industry argued the split undermined viability — with the remaining 70% in short-term UK government debt, a £40 billion aggregate issuance cap, and 24-hour redemption at par.
BoE Mandate: the reserve rule decides who survives
A mandate to "support stablecoins" sounds like a welcome mat. Look at the terms already set.
Under rules finalised in June, any pound stablecoin big enough to matter must park 30% of its backing money at the Bank of England earning nothing. The original demand was 40% — issuers protested they couldn't run a business on it, and the Bank gave ground, publishing its own analysis to argue 30% is survivable. Read that again: the state and the industry openly negotiated the terms on which a private currency is allowed to exist.
And the other 70%? It must sit in short-term British government debt. The same week America's stablecoin law turns dollar issuers into buyers of US Treasuries, Britain's regime turns pound issuers into buyers of gilts. Support the stablecoins, and the stablecoins fund the state.
That's the shape of the "friendly" settlement everywhere now: you may exist, at a size we cap, holding what we choose — and what we choose is our own debt.
Related storylines
- UK crypto regulation evolvesUK crypto regulation framework evolution including stablecoins
2 sources
- UK to Give Bank of England Formal Mandate to Support Stablecoins and Digital Money · coingape.com · T2
- Bank of England set for new innovation mandate covering stablecoins · cointelegraph.com · T1