Two consultation deadlines fall in September 2026, and a UK payment firm can respond to both. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 set the statutory framework for the FCA’s cryptoasset regime, and issuing a qualifying stablecoin becomes a regulated activity on 25 October 2027. The Regulations came into force earlier than that, and only so that the FCA can make rules and give guidance and firms can apply for permission, so the authorisation gateway opens well before the obligations apply. The Government consulted in July 2026 on a single regulatory regime for tokenised and traditional payments. The digital euro is a draft regulation being negotiated in Brussels, and the digital pound is a decision the Government has not taken. A payment institution, an e-money institution, a bank or a technology provider has to settle one question before any of the three, which is whether the rules on digital money apply to it at all.

Firms caught by the digital settlement asset rules

A business can come within the Bank of England’s oversight of payment systems without ever calling itself a digital money business. The statutory test asks what a thing does, not what it is called. A digital representation of value or rights, whether or not cryptographically secured, is a digital settlement asset if it can be used to settle payment obligations, can be transferred, stored or traded electronically, and uses technology supporting the recording or storage of data. Distributed ledger technology is named only as an example. The definition works only by reference to a payment system that includes arrangements using digital settlement assets. Within that, the firms that create or issue the assets, safeguard or administer them, exchange them, set the rules, standards or conditions of access to the system, or provide any service that facilitates or supports a transfer through it are DSA service providers. Oversight does not follow automatically: the Bank of England oversees a payment system or a DSA service provider only once the Treasury has specified it by recognition order under section 184 or section 184A of the Banking Act 2009.

Settling this question before a product is built costs less than settling it afterwards, because the answer determines whether the Bank oversees the payment system, whether the Treasury may designate the provider, and what the firm must hold and report.

Two deadlines in September 2026

The Bank of England published its policy positions for sterling-denominated systemic stablecoin issuers on 22 June 2026, together with a draft Code of Practice implementing them. It is taking feedback on the draft Code until 22 September 2026 and intends to finalise it by the end of 2026. It has changed position. Having consulted in November 2025 on limits on how much stablecoin any one person or business could hold, it has decided not to implement them, on the ground that they would be neither proportionate nor effective. In their place it proposes a temporary guardrail on issuance: an initial maximum of GBP 40 billion in issue per systemic stablecoin, which it would review and expects to loosen and in time remove once the risk to credit provision is mitigated. Individuals and businesses would face no limit on the size, frequency or type of transaction. None of this is in force. The Code is a draft out for consultation, and the guardrail and the figure could both move before it is made. A firm building a sterling stablecoin should therefore model a ceiling on its own issuance, not a ceiling on what its users may hold, and should treat the ceiling as transitional rather than permanent.

The consultation on the design of the future retail payments infrastructure closes on 11 September 2026. It would let regulated stablecoin issuers join the core clearing layer alongside banks. Anyone intending to reach UK retail payments without a bank sponsor should read it, because the outcome determines whether that route exists at all.

If the digital euro arrives, who has to do what

The draft EU regulation does not do one thing to everybody. Four groups carry quite different burdens, and a firm that reads the proposal as a single regime will over-prepare in one place and miss an obligation in another.

A euro-area credit institution that runs payment accounts would have to open digital euro accounts on request, and could not charge an individual for the basic services the proposal lists. It would have to help customers who struggle with digital payment, including older customers and those with disabilities or limited digital skills. For online transactions it would have to build a sweep that empties holdings above the cap into a linked ordinary account when money arrives, and a draw in the other direction so a customer can pay more than they hold. That is a servicing and support cost, carried for any retail customer who asks.

A merchant would have to take digital euro. That is what legal tender status means in the proposal: mandatory acceptance at full face value, no power to refuse, and no exclusion through standard terms the customer never negotiated. An enterprise with fewer than ten staff, or with turnover or a balance sheet total of no more than EUR 2 million, and a non-profit body, would be exempt unless it accepts comparable digital means of payment. Where that line falls is one of the points still being argued over, the Parliament widening it and the Council preferring to drop the size test and look only at what the business already accepts. A refusal made in good faith on legitimate and temporary grounds outside the payee’s control would remain available, and the examples the Commission gives are a power outage and a defective device, with the burden of proof on the payee.

An acquirer would have to serve those of its merchants caught by the acceptance rule, and its charges to them, and the fees passing between providers, would be capped at the lower of its relevant costs plus a reasonable margin and the fees charged for comparable digital means of payment.

A business would be able to hold digital euro under the Commission proposal, which draws no distinction between individuals and companies. Both co-legislators would change that. The Parliament’s position is that a legal person should as a general rule hold nothing, with incoming amounts swept out within twenty four hours; the Council would let the limit setter adopt a zero holding limit, with sweeping at the end of each business day. A treasury function should plan on not being able to hold digital euro balances, and should treat the mechanics as unsettled.

A UK firm is outside all of this. It would reach the digital euro only through a payment service provider established in the Union. A subsidiary in a euro-area Member State would come within the digital euro Regulation itself; a subsidiary in a Member State whose currency is not the euro would come within a separate proposal, COM(2023) 368, which would let payment service providers incorporated in those Member States distribute digital euro services. Both are proposals at first reading and neither binds anyone yet.

How long you would have

The European Central Bank decides when to issue, and no date has been set. The Commission proposal sets no transitional period at all: it would enter into force twenty days after publication, and requires only that both the online and the offline forms be available from the first issue. The European Parliament would add a roll-out phase of at least twenty four months after issuance is authorised, and pilot testing of both forms before the first issue, but that is a Parliament addition rather than something the Commission proposed. A bank that would have to distribute can size the build now, but should not treat a two year runway as settled.

The numbers are not fixed

No holding limit appears anywhere in the draft, and the figures quoted in the press come from central bank modelling rather than from anything agreed. The institutions have not settled who would set the cap: the Commission would leave it to the European Central Bank, the Council would take the ceiling for itself by implementing decision on an ECB recommendation, and the Parliament would give it to the Commission by delegated act.

Three features of the drafted design have held throughout and can be planned against. Holdings would be capped per person. They would bear no interest. Anything received above the cap would move automatically into an ordinary account. The fee cap and the treatment of the offline form are less settled, so a compliance plan should mark them as assumptions and be able to absorb a change.

The digital pound: nothing to build in the UK

The power to issue a digital pound has not been legislated for. Section 1(1) of the Currency and Bank Notes Act 1954 lets the Bank issue bank notes of denominations the Treasury approves, and no other bank notes; it says nothing about a digital liability. The digital settlement asset rules do not fill the gap: they govern the oversight of payment systems and the firms that operate them, and the Treasury may not specify a payment system operated solely by the Bank of England (section 184(3)) or a DSA service provider so operated (section 184A(3)).

The Government has said since 2023 that it would legislate before any launch, which is the clearest indication that it does not treat the existing powers as sufficient.

In the summer of 2026 there is no bill before Parliament for a digital pound. The Bank of England said on 25 June 2026 that no decision has been taken on whether to proceed, that it and HM Treasury are in the final stages of the design phase, and that they will publish their conclusions later this year. A decision to proceed would not itself launch anything: primary legislation would come first.

So there is no digital pound regime to build for and nothing to comply with. A firm that wants to get ahead can plan against the design papers, but that is planning, not compliance.

How Bratby Law helps

We tell a firm which of these obligations apply to it and which does not. That means a perimeter answer on whether a proposition is regulated today, a mapped set of the digital euro duties that would fall on a particular business model with the unsettled points marked, and advice on distribution for firms established outside the euro area. We review board, investor and customer material so that it describes the digital pound accurately, and we draft the contract terms that allocate the risk. This sits alongside our work on Payment Institution Authorisation and Licensing, Open Banking and Variable Recurring Payments and PSR and Scheme Governance.

Frequently asked questions

Could the digital settlement asset rules catch my firm?

Quite possibly. The test turns on function. A digital representation of value or rights is a digital settlement asset if it can settle a payment obligation, can be transferred, stored or traded electronically, and uses technology that records or stores data. The firms that issue, safeguard, exchange or support it are DSA service providers where they do so in relation to a payment system that uses those assets, whatever the business calls itself. Bank of England oversight follows only where the Treasury makes a recognition order under section 184 or section 184A of the Banking Act 2009, so the perimeter question has two parts: whether the definition catches the firm, and whether recognition is in prospect.

Would my bank have to give customers digital euro accounts?

A euro-area credit institution running payment accounts would have to, on request, and the basic services the proposal lists would be free to individuals. It would also have to support customers who find digital payment difficult and build automatic sweeps in both directions. The regulation is still being negotiated, so none of this binds yet.

Would my shop have to take digital euro?

If you are in the euro area, yes. Acceptance would be mandatory and you could not exclude it in your standard terms. An enterprise with fewer than ten staff, or with turnover or a balance sheet total of no more than EUR 2 million, and a non-profit body, would be exempt unless it accepts comparable digital means of payment. Otherwise a refusal would have to be made in good faith on temporary grounds outside your control, such as a power outage or a defective device, and you would have to prove it.

Can my business hold digital euro?

Not settled. The Commission proposal would let a business hold digital euro. Both the Parliament and the Council would stop it, in slightly different ways, with incoming amounts swept into an ordinary account within about a day. Plan on the basis that a business will not be able to hold balances.

How much could a person hold?

No figure has been agreed, and the numbers in the press come from central bank modelling. Under the drafted design, holdings would be capped, would bear no interest, and anything above the cap would move automatically into an ordinary account.

How long would we have to get ready?

Not fixed. The Commission proposal sets no transitional period. The European Parliament would add a roll-out phase of at least twenty four months after issuance is authorised, with pilot testing before the first issue, but that is its negotiating position and not agreed.

Do we need to do anything about the digital pound?

No. The power has not been legislated for, there is no bill before Parliament and, as the Bank of England confirmed on 25 June 2026, no decision on whether to proceed.

Related payments regulation pages

See also our other payments regulation pages:

Payments Regulation
Payment Institution Authorisation and Licensing
Open Banking and Variable Recurring Payments
PSR and Scheme Governance
Operational Resilience and DORA
Safeguarding and Consumer Duty
EMI Authorisation and E-Money Regulation
FCA Investigations and Enforcement
The PSRs 2017 Explained: Payment Authorisation, Liability and Execution Times
The PSRs 2017 Explained: Information Requirements and Framework Contracts. A firm exploring a digital money or stablecoin proposition that is unsure whether the activity falls within the payment services perimeter at all should read The PSRs 2017 Explained: the Payment Services Perimeter and the Exclusions.

Credentials

Rob Bratby is Managing Partner of Bratby Law and Fractional General Counsel to UK Payments Initiative Limited, the industry body developing the UK’s commercial account-to-account payments scheme. He also holds Fractional General Counsel appointments at The One Touch Switching Company, TelXL and Core. He is ranked Band 2 for Telecommunications in Chambers UK 2026, listed by The Legal 500 as a Leading Partner for IT and telecoms in London, and recognised in the Lexology Index as a Global Elite Thought Leader for telecoms and media and a Thought Leader for data privacy and protection.