The UK government may rebalance power between the Bank of England (BoE) and the country’s main financial regulator, the Financial Conduct Authority (FCA), according to a response to a 40-page consultation published by HM Treasury on 7 August. the former.
UK government launches consultation ‘Payments regulation and systemic circumvention’ in 2022 Receive market input on the BoE’s payment periphery reformGiven the evolution of risks to financial stability.
The final document defines some measures for the regulation of so-called “systemically important stablecoins”. The key aspect is the government’s intention to ensure co-supervision of stable coins in the form of a joint venture between the BOE and the FCA.
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However, the BoE will have the right to prevent the FCA from taking action in relation to a stablecoin provider, and the Prudential Regulation Authority will also have the ability to disqualify the FCA from a specific action. “if it should lead to financial stability concerns”,
As specified in the document, the majority of respondents accepted the need for a greater role for the BOE in the supervision of systemically recognized payment institutions in the future. However, Some interviewees asked for clarity about the limits of its power.,
In July, BoE Governor Andrew Bailey said that both cryptocurrencies and stablecoins fail the basic tests of settlement uniqueness and finality and therefore should not be considered money. Instead, he proposed developing an “advanced digital currency”.
Translation by Walter Rizzo