The Bank of England and the Financial Conduct Authority (FCA) have published their approach to jointly regulating systemic stablecoin issuers in the United Kingdom, dividing supervision between the two bodies.
The FCA will handle conduct and consumer protection and will regulate qualifying non-systemic stablecoins, including their eventual use in retail payments. Where a stablecoin becomes widely used in payments and HM Treasury recognises it as systemic, the Bank of England will supervise its prudential risks alongside the FCA.
Systemic issuers would face a stricter set of conditions. They would be expected to gain direct access to payment systems, hold at least 30% of their backing assets in deposits at the Bank of England, keep reserves with UK custodians, and stay within a temporary £40 billion issuance guardrail applied to each systemic stablecoin. The remaining backing could be held in short-term UK government debt with a residual maturity of up to six months.
The Bank would not set a single industry deadline for meeting the requirements. It would instead set a transition period for each issuer when it is recognised as systemic, which it expects to run typically between 12 and 36 months, taking account of factors such as the issuer's rate of growth and the financial-stability implications of any disruption.
The Bank revised its earlier proposals after industry feedback, lifting the maximum share of backing permitted in interest-bearing assets to 70% from 60% and dropping planned limits on individual holdings in favour of the per-issuer guardrail. It is seeking feedback until 22 September 2026 and intends to finalise its code of practice by the end of the year, which would allow regulated stablecoins to operate from 2027.
