UK eases stablecoin capital rules after industry pushback

Britain's financial regulator announced on Tuesday it will reduce planned capital requirements for stablecoin issuers after facing pushback from the industry. The move is part of a broader regulatory framework designed to bring the cryptoasset sector fully under the Financial Conduct Authority's (FCA) supervision for the first time.

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clear rules of the road

Global policymakers are navigating the challenge of protecting consumers while maintaining competitiveness, especially with crypto-friendly policies emerging elsewhere. British finance minister Rachel Reeves had previously stated the FCA's rules would provide clear guidelines and exclude "dodgy actors."

Following consultations, the FCA will lower a key capital requirement from 2% to 1% of the total value of stablecoins issued. This adjustment aims to create a "proportionate" regime that allows firms to compete internationally. David Geale, executive director for payments and digital finance, noted that initial proposals were perceived as too high, and the final rules incorporated industry feedback.

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keep “dodgy actors” out of the market

The regulator has also eased other requirements, granting firms more time to return funds to customers redeeming stablecoins and removing some public disclosure obligations. Crypto trading rules will be tailored to better reflect market operations. The new regime begins in October 2027, with most stablecoins supervised by the FCA and systemic ones regulated by the Bank of England.

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The feedback we got (was) that we’re starting a bit high

Notably, the FCA's rules on issuers apply only to sterling-denominated stablecoins, a small segment of the global market. Benoit Marzouk, CEO of BCP Technologies, indicated that even the reduced 1% requirement remains challenging, anticipating that U.S. regulations might adopt a flat capital requirement.

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evidence ... from industry