Deputy Governor Cunliffe Outlines Proposals at Global Summit

The Bank of England is considering placing restrictions on stablecoins used for payments as part of new regulations for the sector, according to Deputy Governor Jon Cunliffe.

The BoE and the Financial Conduct Authority are set to consult on the new rules later this year, while the Financial Services and Markets Bill is nearing its final stages in Parliament.

Deputy Governor Jon Cunliffe outlined in a speech on Monday that there were already considerations on whether to put limits on stablecoins used for payments in new rules being developed for the sector.

“While, from a public policy perspective, we want competition and innovation in payments we need to guard against rapid, disruptive change that does not allow the financial system time to adjust and could therefore threaten financial stability,” Cunliffe voiced at Innovate Finance Global Summit.

The new rules will regulate stablecoins like commercial bank money, including requirements for the coins to be redeemable from the stablecoin arrangement, in fiat money, at par value and on demand. Cunliffe stressed the need for developing an approach for tokenized bank deposits alongside the stablecoins regime, while also exploring a digital pound and the development of a ledger system to ensure tokenized transactions settle in central bank money.