The Bank of England (BoE) has announced that it will continue with its plans for a systemic stablecoin regime, according to a consultation response released on Monday. Respondents to the consultation welcomed the proposal that the BoE and Financial Conduct Authority (FCA) would jointly supervise the regime. Additionally, the government and respondents supported extending the accountability framework 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. had previously released a series of consultations detailing that systemic stablecoins would be brought under existing regulations, with the new objective of returning customer funds alongside the objective of ensuring continuity of service. However, some respondents expressed concern that this could lead to situations where returning customer funds was prioritized over ensuring continuity of service. The government has stated that it will continue to work with regulators to review its approach.
The Financial Services and Markets Act 2023 was recently passed into law, granting the BoE the power to set up a systemic stablecoin regime.