New regulatory powers Digital settlement assets The Banking Act 2009
The Act expands Part 5 of the Banking Act 2009. This Part of that Act provides for the Bank’s oversight and supervisory powers once a payment system is "recognised" by HM Treasury upon fulfilling the designation criteria set in section 185 of the Act. In recognising a payment system using digital settlement assets or a digital settlement asset service provider, HM Treasury will consider whether an entity is likely to threaten the stability of, or confidence in the UK financial system; or have serious consequences for business or other interests throughout the UK, and if so, they will be considered for recognition. There are currently nine payment systems recognised by HM Treasury, all of whom are within the Bank’s supervision. Once recognised, the Bank will have oversight of the operators of digital settlement asset recognised payment systems and will be able to, for example, issue principles (under section 188 of the Banking Act 2009) and codes of practice (under section 189 of that Act), give directions (under section 191 of that Act), take enforcement action against recognised payment systems or service providers using digital settlement asset and expect compliance with information requests.
	Through the expansion of Part 5 of the Banking Act 2009, recognised payment systems and service providers using digital settlement assets may also be subject to the same sanctions and criminal offences that existing payment systems will be subject to in the event of a compliance failure. For example, if the Bank thinks that a compliance failure threatens the stability of, or confidence in, the UK financial system, or has serious consequences for business or other interests throughout the UK, it may give that operator of the digital settlement asset payment system a "closure order" such that all payment activities or specified activities to cease. A person in breach of a closure order is guilty of an offence, liable on summary conviction, to a fine not exceeding the statutory maximum, or on conviction on indictment, to a fine. Under section 200, the Bank may also issue a management disqualification against a person holding an office or position for making management decisions for a recognised digital settlement asset payment system or service provider. A person who breaches a disqualification order is guilty of an offence under section 200(3) punishable by a fine, on summary conviction, to a fine not exceeding the statutory maximum, or on conviction on indictment.