The Bank of England views stablecoins as “a new form of money” and will open system-wide applications by the end of the year

According to Decrypt on May 14, Sasha Mills, an Executive Director of the Bank of England, announced at the Financial Times Digital Assets Summit that the Bank of England views stablecoins as “a new form of money,” and confirmed that applications for “systemic stablecoins” will be opened before the end of the year. Because these stablecoins are widely used for payments, they may pose risks to financial stability in the UK, and will be directly regulated by the Bank of England.

Systemic vs. Non-Systemic Stablecoins: The Regulatory Split Confirmed by the Bank of England

According to the Bank of England’s official definition, regulatory responsibility is determined by the scale of stablecoin usage:

“Systemic stablecoins” (regulated by the Bank of England): Stablecoins widely used for retail or corporate payments, and therefore may pose risks to financial stability in the UK

Other stablecoins (regulated by the FCA): Stablecoins not widely used for retail or corporate payments

In her statement, Mills explained that the Bank of England’s requirement is that stablecoins “need to be robust and reliable like all other forms of money,” to ensure that users can choose in an interoperable way between tokenized deposits, stablecoins, and electronic money.

FCA Regulatory Sandbox: Four Selected Companies Confirmed

The FCA has officially selected the following four companies to enter its stablecoin regulatory sandbox. Their operating results will provide reference for the FCA to draft stablecoin rules later this year:

· Revolut (a UK neobank)

· Monee Financial Technologies

· ReStabilise

· VVTX

All four companies have existing projects related to stablecoins and meet the regulatory standards set by the FCA. Matthew Long said: “From a regulator’s perspective, our role is to support the industry, but ultimately the responsibility for delivering stablecoins lies with the industry itself.”

US-UK Regulatory Timelines and the GENIUS Bill: Confirmed Pairing

At the summit, Mills confirmed that 99% of stablecoins worldwide are denominated in Dollars and were all created before the GENIUS bill took effect, “so they do not meet the requirements of the GENIUS bill.” She said that the dollar stablecoin industry is issuing “new types of stablecoins that comply with the relevant laws and regulations.” The Bank of England’s comprehensive regulatory framework for systemic stablecoins will open for applications by the end of 2026, and in terms of timing, the UK is “at the same stage as the US.” Matthew Long also confirmed that stablecoins denominated in British pounds “still have a place in the market,” even though the global stablecoin market is currently dominated by Dollar-denominated stablecoins.

FAQ

What exactly does the Bank of England mean by “systemic stablecoins”?

According to the Bank of England’s official definition, “systemic stablecoins” are “stablecoins that are widely used for payments, and therefore may pose risks to financial stability in the UK,” which will be directly regulated by the Bank of England; stablecoins not widely used for retail or corporate payments are regulated by the FCA. The Bank of England will open the full application process for systemic stablecoins before the end of 2026.

What role does the FCA regulatory sandbox play in shaping the UK’s stablecoin rules?

According to the FCA, the operating results of the four selected companies (Revolut, Monee Financial Technologies, ReStabilise, VVTX) in the sandbox will directly provide a basis for the FCA’s formal stablecoin rules to be drawn up later this year. The sandbox is a regulated testing environment that allows companies to test their stablecoin projects before the formal regulations take effect.

How do British pound-denominated stablecoins fit into a Dollar-dominated market?

At the summit, FCA’s Matthew Long confirmed that pound-denominated stablecoins “still have a place in the market.” Mills confirmed that 99% of stablecoins worldwide are currently denominated in Dollars and were created before the GENIUS bill took effect and do not meet the requirements of the GENIUS bill. However, the design of the Bank of England’s framework aims to ensure interoperability, enabling users to freely choose among tokenized deposits, stablecoins, and electronic money.