Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the implications for regulatory oversight of fintech innovation arising from developments in blockchain-based programmable deposit tokenisation in UK banks.

New forms of digital money and payments present potential benefits for both users and providers of payment services, offering faster, cheaper payments with better functionalities and greater security.

The government, alongside regulators, is considering the innovation opportunities that blockchain-based payments instruments, including tokenised deposits, could present the UK financial services sector.

We are working with regulators and industry to design the next generation of retail payments infrastructure, overseen by the Payments Vision Delivery Committee.

Steps have already been taken to set up the right regulatory conditions for firms to safely innovate and experiment with this technology, specifically through the Bank of England and Financial Conduct Authority’s (FCA) work on the Digital Securities Sandbox.

Furthermore, the government recently laid legislation to regulate cryptoassets and stablecoins. This regime will raise standards, strengthen consumer protection, help tackle market abuse, and support the responsible growth of the UK’s cryptoasset sector by providing clear and consistent rules.