UK FCA Seeks Industry Feedback on Crypto Framework Taking Effect in 2027

The UK's Financial Conduct Authority (FCA) is establishing issuance and reserve-asset rules for fiat-backed stablecoins, with a focus on ensuring that tokens can be redeemed at face value and protecting holders if an issuer fails. Capital thresholds affect issuance costs and market competition, making them a key part of implementing the UK's crypto-asset regulatory framework.

In its final rules, the FCA cut the capital requirement for stablecoin issuers to half the level previously proposed, easing funding pressure on compliant firms. The available event information does not specify the minimum capital amount, calculation ratio, publication date or effective date. The only confirmed change is a 50% reduction in the capital requirement.

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 is moving to bring digital assets under formal financial regulation. Stablecoins are seen as an important tool for improving market efficiency because they can support payments, settlement and asset tokenization. The Financial Conduct Authority and the Bank of England will operate a dual-track regime, overseeing ordinary and systemically important stablecoins, respectively, while strengthening alignment with US standards.

The UK Treasury recently said digital assets have the potential to transform financial markets. It plans to launch the stablecoin regulatory regime in the second half of 2026 and expects to open applications for systemic stablecoin licenses by year-end. The Bank of England has also described stablecoins as a “new form of money,” stressing that it will not prejudge the choice between stablecoins and tokenized deposits.