The FCA has published proposals for issuing stablecoins, crypto custody and financial resilience of cryptoasset firms, to support a safe, competitive sector.
The latest milestone on the road to crypto regulation, the proposals are the result of extensive engagement through roundtables and feedback on previous discussion papers.
Stablecoins are cryptoassets that aim to maintain a stable value by referencing 1 or more fiat currencies. Stablecoins have the potential to drive efficiency in payments and settlement using blockchain technology, with particular benefits for cross-border transactions. The FCA’s proposed rules aim to ensure regulated stablecoins maintain their value. They also mean that customers should be provided with clear information on how the backing assets are being managed.
In support of the opportunities stablecoins present to financial services and the broader economy, the FCA will explore adding a specific focus on stablecoins to its innovation services in the coming months.
David Geale, executive director for payments and digital finance at the FCA, said: ‘At the FCA, we have long supported innovation that benefits consumers and markets. At present, crypto is largely unregulated in the UK. We want to strike a balance in support of a sector that enables innovation and is underpinned by market integrity and trust.’
The FCA will work closely with the Bank of England on the upcoming regime to ensure a clear pathway in regulation for stablecoins.
Sarah Breeden, deputy governor for financial stability at the Bank of England, said: ‘We welcome the proposals the FCA have published as part of building the UK’s stablecoin regime. For those stablecoins that expect to operate at systemic scale, the Bank of England will publish a complementary consultation paper later this year, including responding to industry feedback around allowing some return on backing assets. We continue to work closely with the FCA to ensure the integrity of the UK’s stablecoin regime, including how firms transition within the regime.’
The FCA's proposals would require firms providing crypto custody services, who have responsibility for keeping consumers’ crypto safe, to ensure they are effectively secured and can be easily accessed at any time. The proposals also seek to reduce the likelihood and impact of firm failures across regulated firms undertaking the activities of stablecoin issuance and cryptoasset custody.
The proposals follow HM Treasury’s draft legislation published in April 2025. The deadline for feedback is 31 July 2025. The FCA will publish final rules in 2026.
Notes to editors
- Read CP25/14: Stablecoin issuance and cryptoasset custody[2].
- Read CP25/15: A prudential regime for cryptoasset firms[3].
- The FCA continues to work closely with the Government, international partners, industry and consumer groups to shape a proportionate crypto regime.