The Bank of England backed tokenized payments and signaled potential reforms to UK stablecoin rules.
Stablecoin News
The Bank of England (BoE) says tokenized payments and digital money could lower costs and expand competition across financial markets. Deputy Governor Sarah Breeden made the case at London's City Week on May 19. She said #tokenization, the practice of representing assets and money on digital ledgers, has the potential to improve how payments and financial markets function. She added that trust and interoperability must be maintained for those benefits to take hold.
Breeden said central bank money will continue to serve as the foundational "anchor" of the monetary system. Private-sector alternatives, including tokenized deposits and regulated #stablecoins, are gaining traction. She said those developments are not in conflict with the central bank's role. She described a future in which consumers pay using tokenized bank deposits, regulated stablecoins, or a retail central bank digital currency (CBDC) alongside traditional accounts.
"More competition, from a wider range of technologies and business models, should lower costs and improve functionality for users," Breeden said, according to a transcript of her remarks. The BoE's CBDC Academic Advisory Group wrote in January 2026 that a retail CBDC is not strictly necessary to maintain monetary uniformity. The group said it may still play a supporting role as cash use declines.
Settlement Infrastructure Gets an Upgrade
On May 19, the BoE proposed extending its core settlement infrastructure to near 24/7 operating hours. The central bank said longer hours would support cross-border payments and securities settlement. Officials linked the proposal to the continued growth of #tokenization and other digital asset technologies.
Earlier in May 2026, Breeden signaled the BoE was reconsidering its position on pound-denominated stablecoins. That review includes whether to ease limits on consumer holdings. The goal is to reduce friction for early adopters while strengthening the UK's position as a hub for #digitalassets.
The BoE has moved away from earlier proposals that would have imposed stricter reserve and backing requirements on stablecoin issuers. Officials have increased direct engagement with industry groups as part of that process. No final framework has been published.
The central bank said it is coordinating with government and other regulators to build rules that support innovation without creating risks to financial stability. Breeden said that balance remains the guiding principle behind the bank's digital money work.
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