UK FCA Halves Stablecoin Issuer Capital Requirement in Final Rules

The UK's Financial Conduct Authority, or FCA, is advancing a comprehensive crypto-asset regulatory regime covering stablecoins, trading, custody and staking services. Firms will be required to obtain authorization and comply with capital and consumer-protection rules. The initiative will test whether Britain can remain attractive to global crypto companies while containing market risks.

The FCA has moved from industry consultation to finalizing the rules, with the final framework scheduled to take effect on October 25, 2027. The stablecoin capital-buffer threshold has been cut to 1%. License applications are expected to open in September, and firms must prepare for the February 2027 authorization deadline. Exchanges and staking providers will both come under the 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.