Digital Money Needs Interoperability Says Bank of England Deputy Governor Sarah Breeden

Highlights:

• Sarah Breeden emphasised the need for global cooperation in regulating digital money and assets.
• The Bank of England is advancing work on interoperability and stablecoin regulation.
• Breeden reaffirmed the importance of maintaining the “singleness of money” for financial stability.

In a speech delivered at the Point Zero Forum 2025 on “The Global State of Digital Asset Regulations”, Sarah Breeden, Deputy Governor of the Bank of England, highlighted the growing importance of interoperability and harmonised regulation in the digital money ecosystem. She outlined the Bank’s priorities on stablecoin regulation and cross-border collaboration to ensure that innovation in digital assets occurs safely and effectively.

Digitalisation and Global Coordination:

Breeden noted that the digitalisation of money and assets is advancing rapidly, reshaping how central banks, regulators, and financial institutions operate. She underlined that these developments are inherently global and require coordinated international efforts to mitigate risks and promote consistency across jurisdictions.

The shift to digital financial infrastructure, she said, offers major opportunities for efficiency and improved functionality. However, to capture these benefits, authorities must ensure that payment systems are upgraded with interoperability and cross-border settlement in mind. According to Breeden, the total value of cross-border payments could reach nearly USD 290 trillion by 2030, making harmonisation crucial to supporting seamless global financial operations.

Focus on Interoperability:

A central theme of Breeden’s address was the importance of interoperability—ensuring users can move smoothly between different forms of money and financial systems. She warned that fragmentation caused by isolated digital ecosystems or “walled gardens” could lead to inefficiencies and potential instability.

Breeden explained that interoperability encompasses both technical and regulatory aspects. Initiatives such as harmonised technical standards or unified ledger concepts, like those proposed by the Bank for International Settlements and the Monetary Authority of Singapore, could play an important role in connecting systems globally. She also stressed that public authorities have a key role in convening efforts to set standards and coordinate across borders.

Stablecoins and the ‘Singleness of Money’:

Discussing the UK’s stablecoin regime, Breeden reaffirmed that maintaining the “singleness of money” — the ability to convert freely and at par between different forms of money — is vital for trust and financial stability. She explained that the Bank of England’s proposed framework focuses on systemic, payment-oriented stablecoins to ensure safe integration into the broader economy.

Breeden acknowledged industry feedback on the proposals, noting calls for clearer distinctions between payment stablecoins, investment tokens, and crypto settlement assets. She said the Bank is reviewing its approach to accommodate different business models while maintaining safety and stability.

Next Steps for the UK Stablecoin Regime:

Looking ahead, Breeden stated that the Bank will continue refining its stablecoin framework through dialogue with the industry and global regulators. She noted that future work will examine how smaller or emerging stablecoins might transition into systemic frameworks and how firms could receive returns on their reserve assets while meeting regulatory standards.

Breeden concluded that maintaining trust in money remains central to the Bank’s mission, especially as innovation accelerates. She pointed to initiatives such as the Digital Securities Sandbox as examples of collaborative environments that allow industry and authorities to test, learn, and share insights, ultimately supporting global harmonisation in digital finance.