In yesterday’s Mansion House speech, the UK’s Chancellor Rachel Reeves confirmed that the issuance of the country’s digital government bond, DIGIT, will take place in early 2027, making the UK the first G7 country to issue a digital sovereign bond. Simultaneously, a joint US-UK statement on stablecoins was published alongside the recommendations of the Transatlantic Taskforce for Markets of the Future, with digital assets receiving top billing. HM Treasury also launched a consultation on modernizing Payments Services Regulation to bring UK issued stablecoins into the payments perimeter.
The most notable part of the stablecoin statement was a commitment to support the “integration of well-regulated stablecoins into activities including payments, settlement, and tokenised financial markets.” It stands out because of the UK’s about turn on the topic. Stablecoins were off the table when the UK launched its Digital Securities Sandbox. The Bank of England only started considering their usage a year ago, confirming they would be allowed in the sandbox a speech in January this year and formally last month. The most obvious point is to explore how to support the acceptance of stablecoins in each other’s jurisdiction. Given the maturity of the US market, that would likely favor the States.
Some time back the UK clarified that it planned to depend on mutual recognition of stablecoins, rather than requiring foreign issuers of non GBP stablecoins to keep local reserves. This was formalized in the recently finalized UK stablecoin framework. Hence, the US-UK statement includes a commitment from both governments to avoid measures requiring inappropriately high levels of ring fenced resources in their own jurisdictions. This contrasts with the fragmentation concerns surrounding multi-issuance stablecoins in Europe, where there are worries that foreign holders could drain EU stablecoin reserves.
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