Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of limiting interest-earning reserves on the commercial viability of pound-backed stablecoins.

The government is committed to making the UK a global hub for digital assets. It recognises the huge potential posed by tokenised asset innovation, and for stablecoins to support innovation in both retail payments and wholesale settlement.

That is why the government is bringing in legislation to establish a new financial services regulatory regime for cryptoassets, including stablecoin, and maintaining a close and ongoing dialogue with the financial regulators as they develop detailed rules and guidance.

This legislation complements other measures being taken forward by the government on digital assets, including: the Digital Securities Sandbox, which supports settlement using distributed ledger technology; the Digital Gilt Instrument pilot issuance; and the publication of the Wholesale Financial Markets Digital Strategy.