Circle Policy Chief Urges UK to Blend EU and U.S. Rules for Crypto and Stablecoin Regime

The Bank of England has defined stablecoins as a “new form of money” that can be used for payments and settlement. The move signals a policy shift from guarding against crypto-asset risks to establishing rules for issuance, reserves and redemption. It has implications for the sterling payment system and the development of tokenized deposits, while giving banks and fintech companies clearer market direction.

By the end of 2024, the BoE plans to begin accepting regulatory applications for “systemic stablecoins” that could be widely used for payments. The Financial Conduct Authority is also supporting sterling stablecoins that meet standards for reserves, redemption and consumer protection. Digital bank Revolut, which already offers crypto-asset services, could be among the first applicants or issuers.

The UK has sought to position itself as a global “cryptoasset hub” since 2022 but has faced industry criticism over its overly cautious regulatory pace. The latest measures mark the first time the country has translated that policy vision into substantive legal rules and a regulatory framework providing clear standards for market operations. The changes could rebuild industry confidence in the UK market and serve as a bellwether for global cryptoasset regulation.

The Bank of England issued a statement on the regulation of systemic stablecoins on June 22, 2026, followed by the Financial Conduct Authority’s final cryptoasset regulatory framework on June 30. The new rules require stablecoin issuers to hold reserve capital equal to at least 1% of the value issued. Companies may begin applying for authorization on September 30, 2026, and the regime will formally take full effect on October 25, 2027.

Stablecoins are moving beyond crypto trading into payments and cross-border settlement, prompting major markets to establish dedicated regulatory regimes. The European Union began applying MiCA’s stablecoin provisions in June 2024, while the United States adopted the GENIUS Act in 2025. Both frameworks address issuer eligibility, reserve assets, custody and redemption rights, but differences in their requirements could shape where providers establish operations and how they structure international businesses.

The Bank for International Settlements compared stablecoin rules across five jurisdictions and found significant variation in issuance thresholds, reserve custody and redemption procedures. All five nevertheless prohibit issuers from paying interest to stablecoin holders. The BIS warned that entity-based rules may leave a structural loophole: non-bank companies could place wallet, payment or yield-related services in separate affiliates within the same corporate group, preserving the economics of restricted activities while moving them beyond the regulated issuer’s formal perimeter.