UK and U.S. Coordinate Stablecoin Regulations to Avoid Market Fragmentation and Foster Innovation

The Bank of England is moving to adjust its stablecoin regulatory approach to better align with U.S. standards, highlighting the need for coordinated efforts between the two countries to support both innovation and stability in the $310 billion stablecoin sector. Deputy Governor Sarah Breeden, during her speech at the SALT conference in London on Nov. 5, announced that the central bank will release a consultation paper on Nov. 10. This step marks a shift from previously stricter proposals and demonstrates increasing collaboration across the Atlantic, according to

Breeden emphasized the necessity of unified regulations to prevent the global stablecoin market from becoming fragmented. "It’s crucial for the U.K. and U.S. to be in step," she stated, referencing ongoing talks with the Federal Reserve and American regulators. This partnership follows the creation of a joint task force in September, designed to strengthen cooperation on digital assets and capital markets, as reported by Reuters. Breeden also mentioned that the U.K. intends to roll out its regulatory framework "as swiftly as the U.S.," addressing worries that the country might fall behind after the U.S. passed the GENIUS Act in July, according to

The upcoming consultation paper is anticipated to detail requirements for stablecoin issuers, focusing on issues such as transparency, reserves, and consumer protection. Breeden’s statements indicate that the Bank of England is moving away from earlier, more rigid capital requirements for stablecoin firms, opting instead for a more adaptable framework to foster innovation while managing risks, as noted by Reuters. Aligning with U.S. standards may help speed up the global use of stablecoins, which are playing a growing role in payments and financial services.

The U.S. and U.K. have historically led the way in digital asset regulation, with the GENIUS Act providing a model for international standards. By matching U.S. regulatory timelines and policies, the U.K. hopes to establish itself as a leading center for stablecoin development without sacrificing financial security. Nonetheless, some critics warn that moving too quickly with regulations could leave gaps in consumer protection.

The Bank of England’s consultation is expected to draw close attention from stablecoin providers and fintech companies. A well-balanced regulatory stance could attract global investment while keeping the sector robust against systemic threats. At the same time, the progress of the U.S. task force will be watched as a sign of how joint efforts between the two nations may influence the evolution of digital currencies.