Key facts
- The UK's Financial Conduct Authority (FCA) has finalized crypto rules covering capital requirements, admissions, and disclosures.
- The Bank of England has removed proposed limits on fiat-pegged stablecoin holdings.
- The reserve requirement for stablecoin issuers has been lowered from 40% to 30% by the Bank of England.
- These regulatory changes are intended to support consumer and institutional crypto adoption.
- Firms must be authorized under the new crypto regime by October 2027.
The United Kingdom is signaling a stronger commitment to becoming a global cryptoasset hub through recent regulatory actions by the Financial Conduct Authority (FCA) and the Bank of England. These steps aim to create a more workable environment for both consumers and institutions engaging with cryptocurrencies.
The FCA has finalized its crypto rules, providing guidance on capital requirements, admissions, and disclosures for crypto firms, alongside a broader conduct framework. Concurrently, the Bank of England has decided against imposing previously proposed limits on holdings of fiat-pegged stablecoins and has reduced the reserve requirement for issuers from 40% to 30%.
These measures represent a shift from earlier, more restrictive proposals that had drawn criticism from the industry for potentially hindering growth and competitiveness. For instance, the Bank of England's November 2025 proposals included strict caps on stablecoin holdings, which many argued were too conservative. The FCA's previous regulatory approach was also perceived as overly cautious, with slow authorization times and unclear marketing rules.
Globally, other jurisdictions like the EU with its MiCA framework and the US with the GENIUS Act have been moving to establish regulatory certainty for stablecoins. The UK's recent actions appear to be a response to this, aiming to catch up and foster innovation.
A key encouraging aspect of the recent announcements is the regulators' apparent willingness to adapt based on industry feedback. The adjusted stablecoin reserve requirements are seen as a positive move towards making stablecoins commercially viable. The FCA and Bank of England are also set to collaborate on the stablecoin regime, with further consultations planned.
However, some aspects, such as the £40 billion cap on systemic sterling stablecoins, are still considered modest compared to major global stablecoins. The Bank of England has indicated this cap may be revised as stablecoins become more integrated into the financial system.
The UK crypto industry is now focused on the October 2027 deadline, by which all operating firms must be authorized. The finalization of rules for areas like DeFi, operational resilience, and digital asset taxation remains pending. The continuity of crypto policy through potential political transitions will be a key test for the UK's ambitions in the sector.