UK Consults on Stablecoin Issuance Rules for Banks

British authorities opened a consultation on a framework that would permit banks to issue sterling-denominated payment tokens without a separate licence, treating issuance as an extension of deposit-taking activity.

The draft rules require full backing in central bank reserves or short-dated government securities, same-day redemption at par, and segregation of backing assets from the issuer's own balance sheet.

Payments firms without banking licences would continue to be supervised under a distinct regime, a two-track approach that trade bodies have criticised as creating unequal treatment for economically similar products.

Officials argue the distinction reflects genuine differences in the failure consequences of a bank and a non-bank issuer.

The consultation runs for twelve weeks. A policy statement is expected in the first half of next year.