In her speech, Mills talks about how recent innovations in digital assets and payments pose both opportunities and risks to the Bank in meeting its monetary and financial stability objectives. She highlights the Bank’s recent work on innovation, including its Discussion Paper on its approach to innovation in money and payments, the launch of our Digital Securities Sandbox, and experiments on wholesale payments.

The FCA is proposing updates to the Financial Crime Guide in relation to sanctions, proliferation financing and transaction monitoring, as well as adding references to cryptoassets and the Consumer Duty, along with consequential changes throughout the Guide.

With these changes, the FCA wants to:

• help firms understand what we expect;
• help firms assess the adequacy of their financial crime systems and controls; and
• remedy deficiencies.

Deadline for comments is 27 June 2024.

Bank of France (representing the Eurosystem), Bank of Japan, Bank of Korea, Bank of Mexico, Swiss National Bank, Bank of England and the Federal Reserve Bank of New York will seek to work in partnership with a large group of private financial firms convened by the Institute of International Finance (IIF). 

Project Agorá builds on the unified ledger concept proposed by the BIS and will investigate how tokenised commercial bank deposits can be "seamlessly integrated with tokenised wholesale central bank money in a public-private programmable core financial platform."

According to BIS, this could "enhance the functioning of the monetary system and provide new solutions using smart contracts and programmability, while maintaining its two-tier structure." 

The BIS will issue a call for expressions of interest to private financial institutions to join Project Agorá. 

The proposals will allow participants to use developing technologies such as distributed ledger technology to undertake the activities traditionally associated with central securities depositories and trading venues. 

The DSS will allow firms to explore the benefits of these new technologies and practices in traditional financial markets.

The Bank and the FCA will pursue three overarching aims: 

• Facilitating innovation to promote a safe, sustainable, and efficient financial system.
• Protecting financial stability, and
• Protecting market integrity and cleanliness.

The DSS lasts for five years and will help regulators "design a permanent technology friendly regime for the securities market."

Deadline for comments is 29 May 2024.

The paper focuses on sterling-denominated stablecoins because these are "the most likely digital settlement assets to be used widely for payments". 

Part one outlines the central bank's role in ensuring the safety of money and payments and the scope of the regime, while Part two explains the proposed requirements of the regime.

The paper is published alongside a discussion paper from the Financial Conduct Authority on its regulatory approach to stablecoin issuers and custodians, a letter from the Prudential Regulation Authority to bank Chief Executive Officers on innovations in the use by banks of deposits, e-money and stablecoins, and a roadmap paper, which sets out how the various regimes interact together. 

With these joint publications, regulators aim to "provide clarity as to which regulatory regime each form of money and money-like instrument falls under, with regulatory boundaries between each regime clearly established."

The deadline for comments on the Bank of England's discussion paper is 6 February 2024.

The FCA proposes to define the standards that issuers and custodians of regulated stablecoins are required to meet, once the regime comes into force. To be authorised under the new regime, issuers and custodians will "need to show they can meet these standards, deliver on the promise of stability, and provide legal protections consumers can expect from a regulated stablecoin."

The FCA has also given further detail on the Treasury’s idea for consideration to allow overseas stablecoins access to the UK payment chain, subject to being assessed by firms acting as ‘payment arrangers’. Payment arrangers would be regulated through the PSRs. They would be able to "initiate or arrange a payment using overseas stablecoins." However, they would first have to assess if the fiat-backed stablecoin and the stablecoin issuers meet the FCA's required standards. 

The FCA's discussion paper is part of a joint publication package with the Bank of England’s discussion paper on systemic payment systems using stablecoins and related services providers, and the Prudential Regulation Authority’s Dear CEO letter on innovative uses of deposits, e-money and stablecoins. 

To accompany these publications, the FCA is also publishing a joint ‘Roadmap paper’ with the Bank of England and Prudential Regulation Authority, which aims to explain how its proposed regimes interact and its approach for dual regulation. 

The deadline for comments on the FCA discussion paper is 6 February 2024.