UK to Introduce Legislation on Stablecoins by August: BoE’s Cunliffe

The U.K. Treasury – in consultation with other regulatory bodies including the Bank of England (BoE), the Payment Systems Regulator (PSR) and the Financial Conduct Authority (FCA) – will introduce legislation on a regulatory system for stablecoins before the August summer break, said Deputy BoE Governor Jon Cunliffe on Wednesday.

Speaking at the Qatar Centre for Global Banking and Finance’s annual conference, Cunliffe said recent events have delayed plans a bit. He’s likely referring to the last 24 hours, when Treasury chief Rishi Sunak and senior Treasury official Jon Glen resigned from their roles in Prime Minister Boris Johnson’s government. Both Sunak and Glen had presented themselves as fans of crypto, announcing months ago their hope the U.K. would become a hub for digital assets.

In April, the Treasury, in its response to a stablecoin consultation from January, said that the government would initially look to regulate that sector of crypto using the 2017 Payment Service Regulations, Financial Services Act and the 2011 Electronic Money Regulations Act. It promised more detailed requirements for stablecoins to be developed with the help of the BoE, FCA and PSR.

Cunliffe also spoke about plans outside of the U.K., saying the committee on payments and market infrastructures (CPMI) – the international panel that Cunliffe chairs – will finalize guidance on global standards for systemic payment systems before the summer break. Among the issues: What assets should back these stablecoins, what should the redemption or claim be and how do you ensure if a stablecoin or money that is being used at a systemic level is safe. The CPMI also plans a report on how the Basel Framework for banking should apply to stablecoins, Cunliffe said.

UPDATE (Jul 20. 17:02 UTC): Clarifies that the April Treasury publication was a response to a stablecoin consultation from January in the penultimate paragraph.