Image credit: Unsplash
Key Takeaways
- The FCA’s June 30 rulebook covers market abuse, stablecoin issuance, and capital requirements, with full authorization taking effect October 25, 2027.
- The Bank of England scrapped individual stablecoin holding caps in favor of a temporary £40 billion issuance ceiling per systemic sterling stablecoin.
- The UK trails the EU and US on stablecoin regulation timelines, and political transition following PM Keir Starmer’s resignation adds uncertainty to remaining rulemaking.
The UK’s Financial Conduct Authority published final rules for a comprehensive cryptoasset regulatory regime on June 30, and the Bank of England eased its proposed stablecoin restrictions on June 22, marking a significant step toward the UK’s stated goal of becoming a “global cryptoasset hub,” an ambition then-Prime Minister Rishi Sunak first outlined in 2022.
FCA Publishes Final Rulebook for Crypto Firms
The FCA’s June 30 package covers admissions and disclosures, a dedicated market abuse regime for cryptoassets, stablecoin issuance, prudential capital requirements, and how the FCA Handbook applies to cryptoasset firms. The regulator will begin accepting authorization applications on September 30, 2026, with the mandatory regime taking full effect on October 25, 2027. Firms that submit applications by February 28, 2027 retain transitional protections until then.
The FCA made targeted concessions after consultation, including cutting the capital requirement for qualifying stablecoin issuers from 2% to 1% of stablecoins in issuance. David Geale, the FCA’s executive director of payments and digital finance, said in a statement that the framework “doesn’t force firms to choose between regulatory certainty and room to innovate.” The regulator has also flagged further consultations this year on decentralized finance guidance and operational resilience standards for firms using distributed ledger technology.
Bank of England Scraps Individual Stablecoin Holding Caps
Separately, the Bank of England on June 22 abandoned a proposal to cap individual stablecoin holdings at £20,000 and business holdings at £10 million, a plan first set out in November 2025 that drew criticism from industry groups and a House of Lords committee. In its place, the central bank introduced a temporary £40 billion issuance ceiling applied to each systemic sterling stablecoin, which it has said it intends to phase out as the market matures.
The Bank also lowered the share of reserves that systemic stablecoin issuers must hold as non-interest-bearing deposits at the central bank, cutting the requirement from 40% to 30% and allowing issuers to place up to 70% of reserves in short-term UK government debt. Redemption requirements remain unchanged: issuers must honor redemptions at face value within 24 hours, with no minimum redemption amount, and are barred from paying interest to coin holders. The Bank’s consultation on the draft Code of Practice closes September 22, 2026.
How the UK Compares to the EU and US
The UK’s timeline puts regulated sterling stablecoins roughly three years behind the EU, where the Markets in Crypto-Assets regulation has governed stablecoin issuance since June 2024, and behind the US, where the GENIUS Act established a federal framework in 2025. Industry figures have noted that the UK’s requirement for a fixed share of unremunerated central bank deposits has no direct equivalent in either the EU or US regimes.
Chet Shah, chief executive of London-based, FCA-regulated fintech firm Wirex, said in a July 11 opinion column that the two announcements together represent “the clearest signal yet that the UK intends to build a leading crypto regime rather than simply talking about it.” Shah pointed to broader stablecoin adoption trends as context: unique holder addresses for non-dollar stablecoins grew roughly 30-fold between January 2023 and February 2026, according to a joint report from Visa and the blockchain analytics platform Dune.
Political Transition Adds Uncertainty
The regulatory progress comes as the UK enters a period of political transition. Prime Minister Keir Starmer announced his resignation on June 22, and Andy Burnham, the former mayor of Greater Manchester, is widely expected to succeed him as Labour leader and prime minister within weeks. Large parts of the UK’s digital asset framework remain unfinished, including DeFi guidance, operational resilience standards, and the tax treatment of digital assets, and it remains unclear how the incoming administration will handle the remaining rulemaking process.
