The House of Lords has passed an amendment obliging HM Treasury to draw up a formal strategy covering crypto assets, stablecoins, tokenized securities, and the wider digital financial infrastructure that underpins them.

The measure was attached to the Financial Services and Markets Bill. Its passage reflects peers' view that the UK's current standing in the global crypto race is insufficient, with several Lords openly voicing concern that the country risks falling behind the United States and the European Union.

What the amendment requires

Rather than continuing to regulate digital assets in a piecemeal fashion, the amendment compels the Treasury to produce a single, cohesive strategy. Its scope is broad, extending across crypto assets, stablecoins, tokenized securities, and digital financial infrastructure.

For observers of the UK's approach, the significance lies in consolidation: the obligation ties together strands of policy that currently sit with different authorities — from the Bank of England's stablecoin rules to the Financial Conduct Authority's forthcoming crypto regime — and places them under one government-level plan.

The push builds on a report published in June 2026 by the Financial Services Regulation Committee. That report urged regulators to ease up on stablecoins, calling in particular for a reconsideration of the initial 40% unremunerated central bank deposit requirement — a condition critics argued would make UK-based stablecoin issuance economically unviable.

The Bank of England responded, at least partially, on September 10, 2026, issuing a policy statement that refined its approach to systemic stablecoins. Under the revised backing structure, 70% of reserves must be held in short-term UK government debt and 30% in unremunerated BoE deposits. The statement also introduced a temporary issuance cap of £40 billion per systemic stablecoin.

The bigger regulatory picture

The Financial Conduct Authority is set to oversee a new comprehensive framework for crypto asset activities, expected to take effect from 2027. A statutory instrument laying the legal groundwork for that framework was anticipated in December 2025.

Peers have been explicit about their motivation: competitiveness. Multiple Lords pointed to the regulatory frameworks emerging in the US and EU as the benchmarks against which the UK should measure itself. The EU's Markets in Crypto-Assets Regulation (MiCA) has been live since mid-2024, while the US has been rapidly evolving its own approach, with stablecoin legislation and market structure bills advancing through Congress. Against that backdrop, the mandated Treasury strategy is positioned as the vehicle through which the UK intends to set out how it plans to keep pace.

What the stablecoin rules mean in practice

The BoE's revised backing requirements represent a pragmatic compromise. The original 40% central bank deposit requirement would have forced stablecoin issuers to park a substantial share of their reserves in non-interest-bearing accounts at the Bank of England. The new 70/30 split, with the majority going into short-term gilts, gives issuers access to yield on the larger portion of their backing assets.

The remaining 30%, held in unremunerated deposits, provides the BoE with a direct lever for monetary policy transmission and crisis management.

The £40 billion cap on issuance per systemic stablecoin adds a systemic risk backstop, giving regulators a hard limit while they assess the real-world effects of these instruments on money markets and payment systems. These rules now form the technical backdrop against which the Treasury's wider strategy will be drafted.