UK Reduces Capital Requirements for Stablecoin Issuers

The country’s Financial Conduct Authority (FCA) issued new rules Tuesday (June 30) for crypto companies, mandating they meet capital and stress testing requirements as well as market integrity rules governing insider trading and market manipulation.

The new framework also sets out rules for stablecoins, including a reduced capital requirement for stablecoin issuers, from 2% to 1%.

“This change makes the prudential framework more proportionate for larger issuers while maintaining the robustness of the overall regime,” the regulator said.

Legislation earlier this year made crypto part of the FCA’s regulatory umbrella. New rules due to go into effect in October 2027 will keep the authority’s oversight of crypto limited to financial promotions and anti-money laundering (AML) controls.

“This is a significant moment for crypto regulation in the UK,” said David Geale, the FCA’s executive director of payments and digital finance.

“We’ve created a framework that doesn’t force firms to choose between regulatory certainty and room to innovate – this regime means they can have both in a stable, competitive home to build and grow. For consumers, it means firms will be held to similar standards to other financial providers, though we can’t regulate away risk.”

The FCA’s new rules come a little more than a week after the Bank of England said it was relaxing its stablecoin restrictions after pushback from the crypto sector. It’s also happening as the European Union’s Markets in Crypto Assets (MiCA) regulations are set to go into effect. Those regulations include a 2% capital requirement for stablecoin issuers.

In other stablecoin news, PYMNTS CEO Karen Webster spoke Tuesday with Plasma Chief Strategy Officer Zaheer Ebtikar, who said the coins’ future lies in banking, not payments.

“Internationally, people don’t have access to financial services, and so they need something like a synthetic dollar,” Ebtikar said in an exclusive interview.

That sentence, the report argued, reframes the debate around stablecoins, from whether a digital dollar can move faster than a card to whether a digital dollar can become the account consumers live out of. Plasma is banking on the idea that it can, and it has built a consumer product, Plasma One, around that wager.

“The market is crowded,” PYMNTS added. “Exchanges, wallets and FinTech apps already hand people access to stablecoins. What Plasma is reaching for is something none of them set out to be. The bank.”