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Post: Bank of England and FCA Extend Deadline for Stablecoin Regulation Comments

Bank of England and FCA Extend Deadline for Stablecoin Regulation Comments

Key Points:

  • The Bank of England (BOE) and the Financial Conduct Authority (FCA) in the UK released discussion papers on stablecoin regulation and custody in November.
  • The original deadline for comments on the papers was February 6, but the BOE has extended the comment period to February 12.
  • The discussion papers approach the topic from different angles, with the BOE focusing on issues related to a sterling-backed retail-focused stablecoin in systemic payment systems, and the FCA examining various stablecoin use cases and emphasizing the principle of “same risk, same regulator outcome.”

BOE Addresses Sterling-Backed Stablecoin in Payment Systems

The BOE’s discussion paper primarily focuses on issues related to the use of a sterling-backed retail-focused stablecoin in systemic payment systems. This includes examining transfer functions and establishing requirements for wallet providers.

FCA Explores Stablecoin Use Cases and Custodianship

The FCA’s discussion paper explores a range of stablecoin use cases and places emphasis on auditing and reporting, prudential requirements, backing, and custodianship. The regulator emphasizes the principle of “same risk, same regulator outcome,” highlighting the need for consistent regulatory outcomes for similar risks.

Hot Take:

The extension of the comment period by the Bank of England indicates a willingness to allow for more feedback and input from stakeholders. This demonstrates a commitment to ensuring thorough and effective regulation of stablecoins. The different approaches taken by the BOE and FCA reflect the complexity and multidimensional nature of the stablecoin industry, requiring comprehensive analysis from multiple perspectives.

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