UK Sets Out Regulatory Plan for Stablecoins and Tokenized Deposits

The UK Treasury has unveiled plans to regulate stablecoins and tokenized deposits within the same framework that governs traditional payment services, announcing the move during the London FinTech Festival. Under the proposal, stablecoins used for payments would fall under a forthcoming issuance regime. The Treasury also plans to broaden the Financial Conduct Authority's (FCA) remit over open banking and assess how rules may need to evolve as payment activity is increasingly carried out by AI agents. The package includes new legislation intended to cut administrative friction for firms providing stablecoin-based payment services. Separately, the Treasury named Chris Woolard CBE—an EY partner and former interim CEO of the FCA—as Wholesale Digital Markets Enabler. He will be tasked with supporting the development of a tokenized wholesale financial system. The government also committed £1 million (about $1.35 million), starting in April, to back the Financial Innovation and Technology Hub. City Minister Lucy Rigby said the goal is to build a secure and competitive payments ecosystem that can capitalize on technological change. The government said it sees digital assets and blockchain as having the potential to reshape how consumers and businesses engage with financial services.