According to a response to a consultation released recently, the Bank of England (BoE) intends to continue with its plans for a systemic stablecoin regime.
The consultation specified that systemic stablecoins would be under the FCA’s and the BoE’s supervision, which was welcomed by respondents. The accountability framework, which assesses whether the regulators’ strategy is future-proof, was also backed by respondents and the government to include 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 stated.
Last year, the U.K. published a series of consultations outlining how systemic stablecoins would be brought under current regulations with a new goal of restoring client funds in addition to the goal of ensuring operations continued, which frightened some respondents.
“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,” according to the study. The administration declared that it would keep reviewing its strategy with regulators.
The Financial Services and Markets Act 2023, which provided the BoE authority to establish a systemic stablecoin framework, was just passed into law in the United Kingdom. The BoE has stated that it intends to release its systemic stablecoin regulations this year.