The Bank of England and the Financial Conduct Authority (FCA) have set out their joint approach to regulating systemic stablecoin issuers in the UK. The regulatory framework outlines how both authorities will supervise major digital settlement asset firms once recognized by HM Treasury.
Two-Part Integrated Regulatory Regime
Under the joint framework, the Financial Conduct Authority will regulate all qualifying stablecoin issuers operating from an establishment in the UK. However, if HM Treasury recognizes a stablecoin issuer as systemic due to its potential impact on financial stability, it will fall under joint supervision with the Bank of England assuming responsibility for prudential regulation.
The Bank of England’s rules are focused on advancing its financial stability objective, particularly where stablecoins are used at scale for everyday retail and corporate payments. Meanwhile, the FCA’s rules apply to conduct of business, market abuse regimes, consumer duty, and financial crime obligations across all authorized cryptoasset firms.
Backing Asset and Capital Expectations
For sterling-denominated stablecoin issuers recognized as systemic, the Bank of England requires that a minimum of 30% of backing assets be held in central bank deposits at the Bank of England. Up to 70% may be held in short-term UK government debt securities of six months or less in maturity.
Systemic issuers are also expected to secure direct access to payment systems and provide clear redemption rights for token holders without unreasonable conditions. For non-systemic firms, reader safety and taxation context can be reviewed alongside our UK Crypto Tax Guide.
Transition Periods for Growing Issuers
To support transition, the Bank of England expects typical transition periods for newly recognized systemic issuers to range between 12 and 36 months. This allows firms up to 12 months to apply for a central bank settlement account and transition backing assets, with up to an additional 24 months to meet complete capital and reserve requirements.
Main picture: Screenshot of bankofengland.co.uk, 5 Nov 2026
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