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 brought qualifying stablecoins within FCA regulation from 25 February 2026, and 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. Anything that can settle a payment obligation, can be transferred, stored or traded electronically, and uses technology supporting the recording or storage of data is a digital settlement asset, and distributed ledger technology is named only as an example. The firms that create or issue it, safeguard or administer it, exchange it, set the rules for access to the system or provide any service supporting 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 will apply a temporary guardrail on issuance: an initial maximum of GBP 40 billion in issue per systemic stablecoin, which it will review and expects to loosen and in time remove once the risk to credit provision is mitigated. Individuals and businesses will face no limit on the size, frequency or type of transaction. 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 hand out digital euro accounts on request and provide the basic services free. It would have to help customers who struggle with digital payment, including older customers and those with disabilities. It would have to build a sweep that empties holdings above the cap into an 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 that already takes card or other digital payment would have to take digital euro, and could not refuse it through standard terms the customer never negotiated. Very small businesses and charities are likely to be exempt, though the line between exempt and caught is one of the points still being argued over. Genuine and temporary refusals would remain available for a power cut, a broken terminal or an unattended till.

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.

A business holding digital euro would generally hold none at all. It would have roughly a day to sweep the takings it receives into an ordinary account, and could hold without limit while the network is down.

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. Once it decides, the draft gives at least two years of roll-out, and requires live testing of both the online and offline forms before the first issue. A bank that would have to distribute can therefore size the build now, even without a launch date.

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.

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

No statute gives the Bank of England power to issue a digital pound. Section 1(1) of the Currency and Bank Notes Act 1954 lets it issue bank notes of denominations the Treasury approves, and no other bank notes; it says nothing about a digital liability, and the Government has said it would legislate before any launch. 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.

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 nothing to build and nothing to comply with.

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. If something can settle a payment obligation, can be transferred, stored or traded electronically, and uses technology that records or stores data, it is a digital settlement asset, and the firms that issue, safeguard, exchange or support it are DSA service providers, 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 would be free. 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 take card or other digital payment and you are in the euro area, yes. You could not exclude it in your standard terms. Very small businesses and charities are likely to be exempt, and refusals would otherwise be limited to a power cut, a broken terminal or an unattended till.

Can my business hold digital euro?

Generally no. A business would have about a day to sweep incoming payments into an ordinary account, and could hold without limit while the network is unavailable.

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?

At least two years of roll-out after the European Central Bank decides to issue, with live testing before that. The date is not knowable yet. The build window is.

Do we need to do anything about the digital pound?

No. There is no statutory power to issue one, 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

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.