The Financial Conduct Authority (FCA) published its consultation paper CP25/14 on 2 July 2025, outlining new proposals for the issuance and custody of qualifying stablecoins in the UK. The consultation, which opened on 28 May 2025 and closes on 31 July 2025, is part of a broader regulatory roadmap aimed at creating a secure and competitive payments and cryptoasset ecosystem in the UK. If implemented, the new rules could come into effect as early as 2026, directly impacting payment services and e-money firms operating with stablecoins.
Overview of the FCA’s Stablecoin Proposals
- Full Asset Backing: Regulated stablecoins must be entirely backed by reserve assets, ensuring holders can reliably redeem coins at par value.
- Safeguarding Requirements: Clear separation of customer funds and detailed guidance on asset management to protect consumers in case of issuer insolvency.
- Scope: Applies to qualifying stablecoins referencing fiat currency, with particular implications for payments, cross-border transfers, and settlements via blockchain technology.
In addition to CP25/14, the FCA has released CP25/15, which sets out prudential requirements for stablecoin issuers and cryptoasset custodians. Collaboration with the Bank of England is ongoing, reflecting the authorities’ joint intent to develop consistent and robust regulation across the financial sector. The proposed framework is designed to benefit both consumers and firms by providing greater transparency and reducing risks associated with cryptoassets.
| Key Date | Proposal/Requirement | Who is Affected? |
|---|---|---|
| 28 May – 31 July 2025 | CP25/14 Consultation Open | All market participants |
| From 2026 (if adopted) | Stablecoin issuance & custody rules | Payment & e-money firms, consumers using stablecoins |
| Alongside CP25/15 | Prudential requirements for issuers | Stablecoin issuers & custodians |
Qualifying stablecoins, as defined by the FCA, are digital tokens intended to maintain a stable value by being linked to regular fiat currencies. The regulator recognises their potential to enhance efficiency in payments and settlements, particularly in international transactions, but emphasises the need for safeguards to ensure consumer protection and market stability.
For further information, the original FCA consultation paper can be accessed here. Updates regarding payments technology and regulatory oversight can also be found in our articles on Apple Tap to Pay, e-wallets in UK online betting, fast casino withdrawals, regulatory updates on payment platforms and our guide to casino withdrawal methods.
