Stablecoins and tokenisation will be at the forefront of how Brits make payments as the UK government overhauls regulation, a top official said this week.

The British government in a Tuesday statement announced a new range of measures to “help the UK remain at the cutting edge” with fintech — including by regulating stablecoins.

The measures would modernise payment services regulation by creating a single framework covering both traditional and tokenised payments, the Treasury said. The measures would also explore how regulation should adapt to AI agents making payments on behalf of consumers and businesses.

Stablecoins are not widely used in the UK currently, but the country's Financial Conduct Authority is drawing up a regulatory framework for cryptoassets — including stablecoins — that will come into force in October 2027.

“Fintech is a true British success story, and we are backing the industry to maintain its competitive edge and go even further and faster in driving growth,” Lucy Rigby, economic secretary to the Treasury, said.

The Treasury also said it had appointed Chris Woolard CBE as the government’s new wholesale digital markets champion to lead the government’s work to deliver “a more efficient and competitive financial sector by building a tokenised wholesale financial markets system.”

Woolard, currently a partner at Big Four accounting firm Ernst & Young, was previously a board member and interim chief executive at the FCA. He also worked as a civil servant and served briefly as a regulator at the Bank of England, according to his LinkedIn profile and a BoE profile page.

Stablecoin push

The Treasury added that it was also bringing forward legislation to slash “administrative burdens” for companies wanting to issue stablecoins in a bid to cement the UK as “a world-leading destination for digital assets while maintaining safeguards” but did not provide additional details when contacted by DL News.

Stablecoins are largely issued by US companies, and dollar-backed tokens reign supreme. Pound sterling-backed stablecoins are a tiny market — worth just $30 million, according to DefiLlama data. Tether, the biggest stablecoin issuer, debuted a pound-backed token, but it never gained traction.

The Bank of England has called for international standards for the assets.

Dante Disparte, chief strategy officer and head of global policy and operations at stablecoin issuer Circle, warned in an op-ed this month that the UK was falling behind the US and EU with regulating the tokens.

Following the US and EU?

US lawmakers now are rushing to regulate the space. The Clarity Act, which would classify most tokens as securities or digital commodities, could see a vote in May, according to Punchbowl News.

The EU also has an extensive regulatory framework for crypto and tokenised assets, the Markets in Crypto-Assets regulation, or MiCA, which analysts have said will help drive adoption of the tokens.

The UK says it’s following suit. Woolard’s appointment will help “drive tokenisation in our markets” in order to help the “next digital big bang” for the UK, Rigby said.