The UK Treasury is pushing to place stablecoins, tokenized deposits, and traditional payment services inside a single regulatory structure, rather than leaving digital payment assets in a separate crypto track. Under the direction now taking shape, fiat-backed stablecoins used for payments would enter a new issuance and payments regime, while systemic pound-denominated stablecoins would be supervised jointly by the Bank of England and the Financial Conduct Authority.
Treasury wants tokenized payments brought into mainstream rules
The policy signal was delivered during London Fintech Week. Economic Secretary to the Treasury Lucy Rigby told the House of Lords Financial Services Regulation Committee that bringing stablecoins directly into payments rules would help the UK build a framework that covers both traditional and tokenized payments in one coherent structure. The approach revives work first outlined in 2022 and 2023 to amend the Payment Services Regulations so sterling-backed stablecoins used in UK payment chains are explicitly captured by law.
In the model now emerging, stablecoins used as payment instruments would fall under an issuance regime linked to the broader cryptoasset framework under the Financial Services and Markets Act. Running alongside that is tokenized deposits, bank money issued by commercial banks on blockchain infrastructure. UK authorities are treating that category as a complementary pillar, one that lets banks move on-chain while preserving the existing two-tier monetary system.
BoE sandbox work is expanding to settlement use cases
Bank of England officials have already begun widening the Digital Securities Sandbox to include tokenized deposits and regulated stablecoins as settlement assets. The idea is to observe live use cases before locking in a permanent framework. The Treasury’s integration plan builds on that effort and comes with roughly £1 million in fresh funding for fintech pilots using these instruments in payments, treasury operations, and cross-border flows.
Global policy debates often frame central bank digital currencies and private stablecoins as competing models. The UK is moving on a different track. It is advancing stablecoin rules while also leaning heavily on tokenized deposits as a programmable, always-on extension of bank money. Industry material cited in the original reporting described tokenized deposits not as a new form of money, but as a new infrastructure layer that keeps credit creation and deposit guarantees inside the banking system even as settlement shifts on-chain.
Coordination across the Treasury, BoE, and FCA is becoming clearer
Seen together, the Treasury’s unified framework, the Bank of England’s consultation on systemic stablecoins, and the FCA’s 2026 focus on stablecoin payments point to a coordinated regulatory direction. The immediate aim is clear: position the UK as a preferred jurisdiction for regulated digital payment assets in the post-Brexit market. What is already visible is that British regulators are moving to treat stablecoins and tokenized deposits as part of the core payments system, not as a peripheral crypto experiment.