TLDRUK plans to give the Bank of England a second objective to support stablecoin and digital payment innovation.Financial stability stays as the Bank’s main job. The new role would work alongside it.City Minister Lucy Rigby says the change will help the Bank keep driving innovation in digital finance.The Bank already has a similar innovation role for clearing houses and depositories. This would extend it to payment systems.The House of Lords will debate the change on September 7 and September 9.The UK government wants to give the Bank of England a new job. It would ask the central bank to support innovation in payments, including stablecoins and other digital settlement tools.Financial stability will stay as the Bank’s main task. The new role would work alongside it, not replace it.The plan is part of a bill moving through Parliament. It aims to help regulation keep pace with new payment technology.A New Role for the Bank of EnglandUnder the proposal, the Bank would get a secondary objective. This objective would cover innovation in systemic payment systems.That includes new technology and digital settlement assets like stablecoins. The Bank would still have to protect financial stability first.City Minister Lucy Rigby said technology like tokenization and distributed ledger systems could change financial markets around the world.“Whilst financial stability will always remain the Bank’s primary objective, this secondary objective will support the Bank to continue to drive innovation in payments and digital finance,” Rigby said.This is not a brand new idea for the Bank. It already has a secondary innovation objective when it oversees central counterparties and central securities depositories.The government now wants to use the same approach for payment systems. That would include systems built on digital settlement assets.This could give the Bank a clearer path to think about how rules affect stablecoin issuers. It may also apply to tokenized payment networks and blockchain based settlement tools.The government said the goal is to let new technology grow safely. It also wants that growth to help the wider economy.Deputy Governor for Financial Stability Sarah Breeden said the Bank welcomed the plan. She said it would help the Bank support innovation in financial services without giving up on financial stability.What Happens NextThe Bank would have to report to Parliament each year. That report would cover its progress on the new innovation objective.A formal way to measure that progress would also be set up.The government plans to make the change through updates to the Financial Services and Markets Bill.That bill is set for debate in the House of Lords on September 7 and September 9.The change would place stablecoins and tokenized settlement in the same policy space as other core payment systems.It fits into a wider UK push to update how payments work while keeping the system safe. For now, all eyes are on the House of Lords debate next month, which will decide whether this new mandate becomes law.The post UK Government to Give Bank of England Stablecoin Innovation Mandate appeared first on Blockonomi.