News Editor Louis Thompsett and Senior Journalist Kieran O’Connor unpack the FCA’s final cryptoasset rules and the Bank of England’s systemic stablecoin regime – and ask whether a sterling coin can ever be a viable business
The Financial Conduct Authority (FCA) has published its final crypto rulebook. The Bank of England has torn up the per-user holding cap. And the UK now has two regulators overseeing a single stablecoin issuer – but can a sterling coin actually be a viable business?
Stablecoin regulation dominated the agenda this week as the FCA released its final cryptoasset rules alongside the Bank of England’s policy statement on systemic stablecoins.
News Editor Louis Thompsett is joined by Senior Journalist Kieran O’Connor to work through what the two announcements mean for issuers, banks and the UK’s standing against its peers.
FCA, Bank of England divide stablecoin laws
First up is the FCA’s decision to halve the stablecoin capital charge from 2% to 1%. Is that the regulator being talked down by industry lobbying, or a pro-growth body showing it will move on evidence?
The Bank of England, meanwhile, has scrapped the proposed holding cap in favour of a temporary £40bn issuance guardrail per coin. It looks more usable — but it swaps one ceiling for another, and there is still no clear guidance on when or how that guardrail gets reviewed. If a single coin becomes a de facto sterling rail, is £40bn really that high?
Commercial viability a consideration across the new rules, with ClearBank questioning whether a bank can issue a workable sterling coin at all – is the regime built for fintechs and PSP issuers rather than banks?
The UK’s reserve rules – 30% held at the bank, 70% in short-dated gilts, with no yield passed to holders.
All of this sets up the comparison between the three main regimes. GENIUS in the US lets issuers hold short-dated treasuries and keep the yield, making a dollar coin a genuine business. MiCA forces 60% of significant-coin reserves into bank deposits – enough to push Tether out of the market entirely. The UK is somewhere in between.
The US went the legislative route, the EU wrote a rulebook, and the UK left it to the regulators to divide up – the FCA licensing qualifying issuers, the Bank taking the prudential lead once HM Treasury designates a system as systemic.
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