Bank of England: Stablecoins are a “new form of money,” and is open to tokenized deposits

On May 13, Sasha Mills, Executive Director of Financial Market Infrastructure at the Bank of England, said at the Financial Times Digital Assets Summit: “We are treating stablecoins as a new form of money.” Based on a report by Decrypt, Mills emphasized that the Bank of England is not “picking winners” between tokenized bank deposits and stablecoins; instead, it will allow these two “new forms of money” to develop in parallel, with users deciding through actual use which option fits which scenarios better.

“New form of money”: the central bank’s rare categorization of stablecoins at this level

Pairing stablecoins directly with “money” is the most straightforward policy acknowledgment the UK central bank has made to the crypto industry so far. Standard discussions from major central banks in Europe and the US over the past several years have generally defined stablecoins as “alternatives to money” or “payment instruments,” and very rarely included wording like “new form of money” so directly within the category of money. Mills’s role at the Bank of England is Executive Director of Financial Market Infrastructure, and she is the spokesperson representing the central bank’s official policy direction.

She further clarified: “The Bank of England is not choosing winners. We do not yet know which use cases fit which new form of money better; users should choose through real-life experience, and they should be able to choose in an interoperable way.” This stance differs from some countries’ approach of “develop tokenized deposits first, then consider stablecoins.” The UK is taking a technology-neutral path determined by the market.

Systemic vs. general stablecoins: the UK’s dual-track regulatory framework

The regulatory framework Mills described continues the UK’s dual-track model of “FCA + BoE division of responsibilities”:

Systemic stablecoins: widely used for payments, may create financial stability risks, directly regulated by the BoE

Non-systemic stablecoins: smaller in scale, regulated by the FCA

No matter the size, all stablecoins must be “equally robust”

The application channel for systemic stablecoins will open before the end of this year. Mills emphasized that even though the two tracks are handled by different regulators, technical standards must be consistent to avoid regulatory arbitrage.

Behind “not picking winners”: the Bank of England’s financial infrastructure stance

The “Financial Market Infrastructure” division where Mills serves is the Bank of England unit dedicated to payment systems, settlement, and clearing. Her position on stablecoins, in essence, is to expand the scope of stablecoins being brought into the UK’s payments infrastructure—not to view them as a competitive threat to the existing payments system.

This approach forms a complete package with the “radically changing market potential” signals released the same day by HM Treasury: the Treasury pushes from the industry policy side, the central bank accepts from the payments infrastructure side, and the two lines converge at the specific node of a “systemic stablecoin” license.

Chain News Observations: the Bank of England’s use of “new form of money” is one of the most detailed policy acknowledgments the crypto industry has received, and it effectively elevates stablecoins from the “fintech” category to the level of “money itself.” For issuers of stablecoins and future stablecoin operators, the UK market may become one of the most important compliant entry points in the coming years. The next point to watch is after the opening of systemic stablecoin licensing by the end of 2026—who will obtain the licenses first, and how strict the Bank of England will set the license conditions.

This article, “Bank of England: Stablecoins are a ‘new form of money’ and it won’t pick between them and tokenized deposits,” first appeared on Chain News ABMedia.