Opinions below are his own.
At a pivotal moment for the future of money, last week an evidence session with the Bank of England offered something we do not often get: a clear, candid readout from the heart of the UK’s monetary authority on how it views digital assets, systemic stablecoins, and the digital pound.
After 18 months deeply engaged in the digital assets regulatory debate, as co-chair of the APPG on Digital Markets and Digital Money, I came away with two overriding impressions: the Bank is listening, and the Bank is cautious. Both are understandable. Neither, on their own, will be sufficient.
Let’s start with the positive. The tone of engagement matters, and it is improving. The Bank’s willingness to absorb and reflect on feedback, particularly on its consultation into systemic stablecoins, is both genuine and welcomed. This is not a regulator operating in isolation; it is one actively trying to understand how innovation is unfolding in real time.
That matters because stablecoins are no longer theoretical. Properly structured, they offer the prospect of faster, cheaper, more programmable payments. Improperly handled, they introduce risks that go to the core of financial stability. The Bank’s recognition of both sides of that equation is reassuring. It is taking the time to get this right. But here is the rub: time is not a neutral variable.
We are operating in a global financial system where capital, capability and confidence move quickly. Other jurisdictions are making calls, some more permissive, some more experimental, all reflective of their own economic priorities. The Bank is right when it says “their economies are built differently.” But markets are global. And innovation does not wait for perfect policy alignment.
This brings us to the central theme underpinning everything we heard: risk. At its core, this debate is not about technology, it is about the level of risk the Bank is willing to see, tolerate, and ultimately absorb into the UK financial system. That is a profoundly difficult judgment. Too much risk, and stability is compromised. Too little, and the UK risks regulating itself into irrelevance. Striking that balance is the job. But it requires clarity of intent.
Take the Digital Securities Sandbox (DSS). There is clear enthusiasm within the Bank for its potential. And rightly so, the idea of a controlled environment to test distributed ledger technologies in capital markets is exactly the kind of regulatory innovation the UK should be championing. Yet industry sentiment is, at best, mixed. Firms are asking a simple question: what is the return on participation? Sandbox engagement comes with real costs; time, capital, senior resource.
But too often, the outcomes feel ambiguous. Experimentation without a clear pathway to deployment is not a compelling proposition in a competitive global market. If the DSS is to succeed, it must move beyond being a safe space for testing. It must become a bridge to real-world application, delivering regulatory clarity, commercial viability, and ultimately, scale. Otherwise, we risk creating elegant frameworks that attract interest but fail to retain commitment. The same principle applies more broadly across digital assets policy.
The UK has all the ingredients to lead: deep capital markets, world-class regulatory institutions, and a thriving fintech ecosystem. What it now needs is regulatory confidence. Signals that innovation will not just be permitted, but enabled within clear and proportionate guardrails.
Over the past year and a half, I have engaged with firms across the spectrum, from early-stage innovators to global financial institutions. The message is consistent. They are not asking for a free pass. They are asking for certainty: a framework that is predictable, coherent, and internationally competitive. And that brings us back to Threadneedle Street.
The Bank of England, the Old Lady of Threadneedle Street, has long been synonymous with prudence. That reputation is well earned, and it remains essential.
But prudence, in today’s context, must evolve. It cannot simply be about minimising risk; it must also be about enabling progress. Because here is the reality: innovation, if well-regulated, strengthens systems. It diversifies infrastructure, enhances resilience, and drives efficiency. The question is not whether digital assets will play a role in the future of finance, they already are. The question is where that future will be built.
So yes, the Old Lady must maintain her fiscal virtue. But she must also be ready, on occasion, to ‘show some leg’. That means leaning into leadership. Setting frameworks that others will look to. Moving with intent where the direction of travel is clear, even if every detail is not yet settled. It means recognising that in a global race for innovation, credibility is not just about caution, it is about action.
The evidence session was an important moment. It showed a central bank that is engaged, thoughtful, and alive to the challenges ahead. But the next phase will be defined not by consultation, but by execution.
The UK has a choice: to observe the evolution of digital finance, or to shape it. The market, quite clearly, is ready.
