BoE's Sarah Breeden sets out tokenization and stablecoin agenda; draft systemic stablecoin rules due next month

May 20 — Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, told the City Week 2026 conference in London that the central bank's forward-looking strategy will put tokenization at the center of efforts to modernize the UK financial system. Breeden said future retail payments should support multiple, interoperable forms of money, including tokenized deposits and stablecoins. She added that shared ledger technology could lower payment costs, speed up transactions, and reduce reliance on intermediaries. She described an ideal system as one that promotes competition and consumer choice, enabling the public to pay using tokenized deposits, regulated stablecoins and potentially a retail central bank digital currency (CBDC), alongside traditional bank deposits. On regulation, the Bank of England plans to publish a draft framework for systemic stablecoins next month and complete it by year-end. To curb early-stage risks linked to rapid uptake, the central bank may introduce a temporary cap on the total supply of stablecoins. Breeden also said banks should be encouraged to embed new technologies into their own issued money and ensure tokenized deposits can be used for interbank payments, not only between customers at the same bank. She noted the Bank of England will continue backing the UK government's pilot for tokenized sovereign bonds, the "Digital Gilt," and will publish conclusions from the CBDC project's design phase later this year. Breeden said regulators, government and industry should work together to build on the UK's existing strengths and accelerate development of the country's tokenized finance ecosystem.