The UK’s finance ministry has unveiled a plan to reform the payments sector, harmonizing regulation of traditional services, "stable coins," and tokenized deposits.

The agency will develop legislation to facilitate the use of stablecoins for settlements, and supervision of their issuance and turnover will be entrusted to the Financial Supervisory Authority (FCA). Finance Minister Lucy Rigby has emphasized the "transformative potential" of digital assets and the drive to modernize financial infrastructure with blockchain technology.

The initiative will also cover regulation of AI-initiated transactions, expansion of FCA’s open banking powers, and development of tokenized wholesale markets. The sector will receive £1 million from the Center for Finance, Innovation and Technology, with former FCA acting head Chris Woolard appointed as the Tokenization Direction Manager. CoinCover noted that the focus on stablecoins meets the demands of institutional investors, but a reliable caste infrastructure is critical for widespread adoption.