Bank of England Deputy Governor Breeden outlined the vision for tokenization and stablecoins, revealing plans to release a draft of systemic stablecoin regulations next month.

May 20 — Sarah Breeden, the Bank of England’s executive director for financial stability, told attendees at London’s 2026 City Week conference that the central bank’s upcoming strategy will center on tokenization to modernize the U.K.’s financial system. She noted that tomorrow’s retail payment infrastructure should support multiple interchangeable currency types: tokenized deposits, stablecoins, and other options, with distributed ledger technology (DLT) projected to cut payment costs, speed up transactions, and eliminate unnecessary intermediaries. Breeden outlined her vision for an optimal multi-currency framework that fosters competition and consumer choice: beyond traditional bank deposits, the public should be able to use tokenized deposits, regulated stablecoins, and a potential retail central bank digital currency (CBDC) for payments. On the concrete action front, the Bank of England plans to publish a draft rulebook for systemically important stablecoins next month, with final rules set by the end of this year. To mitigate early risks from rapid adoption, the central bank may place a temporary cap on total stablecoin issuance. Breeden also highlighted efforts to encourage banks to adopt new technologies in their currency offerings, as well as ensuring tokenized deposits work for interbank payments — not just a single bank’s own customers. Additionally, the Bank of England will continue to support the U.K. government’s pilot tokenized sovereign bond initiative, “Digital Gilt,” and will announce the completion of the CBDC project’s design phase later this year. Breeden stated that the top priority now is for regulators, the government, and industry stakeholders to collaborate to expand the U.K.’s tokenized financial ecosystem, building on its current solid foundation.