Key facts
- UK regulators have halved capital requirements for stablecoin issuers.
- The change reduces requirements from 2% to 1% for non-systemic issuers.
- The Financial Conduct Authority published the amended proposals on June 30.
- The move is intended to balance risk management and innovation.
- There are fears this could trigger a "race to the bottom" on risk compared to EU regulations.
The UK's Financial Conduct Authority (FCA) has significantly reduced capital requirements for stablecoin issuers, halving them from 2% to 1% for non-systemic issuers. This adjustment, published on June 30 as part of the forthcoming crypto asset regime, aims to strike a balance between managing risks and fostering innovation within the sector. However, the move has raised concerns among some observers that this divergence from the European Union's regulatory approach could lead to a "race to the bottom," potentially compromising risk management standards in a bid to attract business.