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

The department will prepare legislation to simplify operations for companies using "stablecoins" for transactions. Oversight of 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. She noted that the government sees a "transformational potential" in digital assets for changing the interaction between businesses and consumers.

The reform will also address the following areas:

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

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

Anthony Young, a representative from CoinCover, commented 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, a reliable asset storage infrastructure is just as crucial as a regulatory framework.

In the near future, the Treasury will begin consultations on reforming electronic money services. The government hopes these changes will position the UK as a global financial services hub.

South Korea to Accelerate CBDC Launch

The new head of the Bank of Korea, Heen Song Shin, outlined the priorities for the financial sector during his inaugural speech indicating that the key focuses will be launching the second phase of the "Hangang" project and participating 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 agency, this is necessary to adapt the monetary system to digital transformation.

The central bank also aims to internationalize the won. To achieve this, authorities plan to move the currency market to a 24/7 operation and create an offshore settlement system, aligning the infrastructure with international standards.

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

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 better assess threats in the context of high volatility caused by geopolitical conflicts.

It is worth noting that in April, the Bank for International Settlements warned that many stablecoins function more as investment instruments than as means of payment.