UK to Integrate Stablecoins into Payment System

Bank of Korea to speed up digital won transformation

The UK Treasury has unveiled a strategy for reforming the payment sector. Authorities plan to unify the regulation of traditional services, stablecoins, and tokenized deposits into a single legal framework.

The department will prepare legislation to facilitate operations for companies using ‘stable coins’ for transactions. Control over the issuance and use of such assets in payments will be transferred to the Financial Conduct Authority (FCA).

Finance Minister Lucy Rigby stated that the initiative will help modernize the financial system and adapt it to blockchain technologies. According to her, the government sees the ‘transformational potential’ of digital assets in changing the interaction between businesses and consumers.

The reform will also address the following areas:

• regulation of payments made by AI agents;
• expansion of FCA’s powers in the area of open banking;
• development of tokenized wholesale market systems.

To support the sector, authorities will allocate £1 million to the Centre for Finance, Innovation and Technology. Chris Woolard, former interim head of the FCA, will oversee the development of tokenized systems.

Anthony Young, a representative of CoinCover, noted in a comment to The Block that the focus on stablecoins aligns with the demands of institutional investors. However, he emphasized that for widespread adoption of the technology, not only a regulatory framework is important but also a reliable asset storage infrastructure.

In the near future, the Treasury will begin consultations on the reform of electronic money services. The government expects these changes to make the UK a global center for financial services.

South Korea to Accelerate CBDC Launch

In his inaugural speech, the new head of the Bank of Korea, Hyun Song Shin, outlined priorities for the development of the financial sector. Key areas will include the launch of the second phase of the ‘Hangang’ project and participation in the international ‘Agora’ initiative.

The regulator plans to expand the use of central bank digital currency (CBDC) and deposit tokens. According to the head of the department, this is necessary to adapt the monetary system to digital transformation.

The central bank also plans to internationalize the won. To this end, authorities intend to transition the currency market to a 24-hour operation and create an offshore settlement system. This should align the infrastructure with international standards.

Special attention will be given to the risks of the non-banking sector and the impact of artificial intelligence technologies on the labor market and productivity. The head of the central bank emphasized that AI has already begun to change the economic landscape and requires new approaches to analysis.

To maintain financial stability, the regulator will enhance monitoring of market indicators and expand access to data on off-balance-sheet operations of financial organizations. This will help more accurately assess threats in conditions of high volatility caused by geopolitical conflicts.

Back in April, the Bank for International Settlements warned that many stablecoins function more as investment tools than as a means of payment.