New regulatory powers Digital settlement assets Electronic money and payments legislation
Electronic money is, broadly, monetary value as represented by a claim on the issuer which is: stored electronically, including magnetically; issued on receipt of funds; and used for the purposes of making payment transactions. Although stablecoins have similar characteristics to electronic money, they often, due to their characteristics, fall outside of scope of the payments regulatory regime. This is out of step with the government’s stated objective of ensuring that activities that involve the same risk have the same regulatory outcome.
	Electronic money is currently regulated by the FCA under the Electronic Money Regulations 2011 (EMR 2011), which includes authorisation and supervision of the business of electronic money institutions. There are other forms of payment services regulated under the Payments Services Regulations 2017 (PSR 2017), such as money remittance. Together, this legislation provides powers to the FCA to regulate and supervise firms engaged in relevant payment activities. The FCA regulates payment and electronic money institutions, and is responsible both for conduct and prudential regulation of these institutions.
	The Banking Act 2009 and Financial Services (Banking Reform) Act 2013 (FSBRA 2013) provide the Bank of England (the Bank) with power and responsibility for regulation of systemically important payment systems and service providers to those payment systems, and the Payment Systems Regulator (PSR) with power and responsibility for the economic regulation of payment systems, respectively. In the case of the Banking Act 2009, the Bank regulates and supervises systemic payment systems following a recognition decision made by HM Treasury. Similarly, in the case of the FSBRA 2013, the PSR regulates payment systems following a designation process made by HM Treasury.