Bank of England’s Breeden Calls for Stronger UK-US Cooperation on Stablecoin Regulation

Deputy Governor of the Bank of England, Sarah Breeden, has called for deeper collaboration between the United Kingdom and the United States on regulating stablecoins, saying joint efforts are essential to ensure financial stability in an increasingly digital global economy.

Speaking at a financial policy conference in London, Breeden emphasized that the rise of digital currencies, including stablecoins, has blurred the traditional boundaries of monetary systems. She noted that without coordinated international standards, countries risk fragmented oversight that could expose the financial sector to unnecessary volatility and risks.

Breeden explained that while the UK has made progress in developing its framework for stablecoin regulation under the Financial Services and Markets Act, true effectiveness will depend on cross-border alignment, especially with the United States. “Digital finance does not stop at borders,” she said. “We must ensure that innovation and stability advance hand in hand, and that regulatory consistency supports both competitiveness and confidence.”

Her comments come as the UK Treasury prepares to finalize its rules for the issuance and operation of fiat-backed stablecoins, which are expected to be brought under the oversight of the Financial Conduct Authority (FCA) and the Bank of England. The new framework aims to integrate stablecoins into the broader payments ecosystem while maintaining security, transparency, and consumer protection.

Across the Atlantic, U.S. regulators have also intensified discussions about stablecoin legislation, particularly regarding reserve transparency, capital requirements, and the role of central banks in digital asset oversight. Breeden highlighted that harmonizing these approaches would strengthen investor confidence and prevent regulatory arbitrage, where companies shift operations to jurisdictions with looser controls.

“The opportunity before us is to shape a digital finance landscape that supports innovation while protecting the integrity of the financial system,” Breeden said. “Stablecoins, when properly regulated, can improve efficiency in payments, reduce costs, and foster inclusion. But the guardrails must be consistent and credible globally.”

Industry leaders and analysts have echoed Breeden’s call for alignment, pointing out that both the UK and the US are well-positioned to lead in setting international norms. London’s financial hub and New York’s market influence, they argue, can provide the foundation for a transatlantic standard that could guide the global digital finance ecosystem.

Breeden also reiterated that stablecoin regulation should evolve alongside technological change, with policymakers staying alert to risks associated with algorithmic coins, private payment networks, and tokenized deposits. “Collaboration is not optional,” she added. “It is a necessity in a world where finance is increasingly decentralized, digital, and interconnected.”

Her remarks signal the Bank of England’s growing focus on ensuring that the UK remains a trusted and competitive center for financial innovation, balancing openness with prudence as the era of digital currencies continues to unfold.