The UK cryptoasset and stablecoin regime

Key facts (as of 29 October 2026)

• Law: the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 were passed by Parliament on 4 February 2026 (FCA).
• Rules: the FCA published final rules on 30 June 2026 in PS26/9 to PS26/13, covering admissions and market abuse, stablecoin issuance, regulated activities, prudential requirements and the Handbook (FCA).
• Dates: the authorisation window opened on 30 September 2026; firms that intend to continue operating should apply by 28 February 2027, ahead of the regime coming into force on 25 October 2027 (FCA press release, 30 September 2026).
• Stablecoin issuers: backing assets on a statutory trust per product under CASS 16; redemption at par by the end of the next business day after the issuer receives the token; intragroup custody of backing assets up to 20%; no interest or income from the backing pool passed to holders (FCA, PS26/10, chapters 4–7 and paras 10.2–10.7).
• Capital: £350,000 permanent minimum requirement for issuing qualifying stablecoins; the stablecoin-issuance K-factor (K-SII) cut from 2% to 1%; the requirement is the higher of the PMR, the fixed overheads requirement and the K-factor requirement (FCA, PS26/12, paragraphs 1.3 and 3.3 and Chapter 3).
• Systemic coins: the Bank of England's June 2026 policy raised the maximum share of backing in short-term UK government debt from 60% to 70%, with the rest in central bank deposits, and replaced holding limits with a £40bn issuance guardrail per systemic coin. It intends to finalise its Code of Practice by the end of 2026 (Bank of England).

Who regulates what

The Bank's regime does not cover stablecoins used for non-systemic purposes, such as buying and selling cryptoassets; those are supervised solely by the FCA (Bank of England).

The FCA's policy statements

Stablecoin issuance rules

Source: FCA, PS26/10 (read via WebFetch on 29 October 2026; the PDF returns 403 to plain downloads): ODDR 5% (para. 3.1 and response to Q4), statutory trust (chapter 4), 20% intragroup limit (chapter 5), daily reconciliations and 5% excess (chapter 6), T+1 from receipt of the token (chapter 7), three-monthly disclosures (chapter 9).

NoteThe T+1 clock starts when the token arrives in the issuer's wallet, not when the request is made. Know-your-customer checks have to be done before.

The authorisation path

flowchart LR
    A[Today: MLR registration with FCA] --> B[30 Sep 2026: window opens]
    B --> C[Apply by 28 Feb 2027]
    C --> D{Decided before 25 Oct 2027?}
    D -- Yes, authorised --> E[Operate under new regime]
    D -- Not yet --> F[Continue under savings provisions while assessed]
    C -. late or no application .-> G[May need to stop regulated activity]

Existing registrations do not convert automatically. Firms registered under the Money Laundering Regulations, or authorised under the Payment Services or Electronic Money Regulations, need authorisation if within scope (FCA overview).

WarningFirms that apply after the window closes cannot rely on the savings provisions and may need to stop relevant activities until authorised (FCA overview). If you rely on a UK crypto provider, ask whether it has applied.

UK, EU and US compared

Sources: FCA; GENIUS Act and OCC rule (see The GENIUS Act and the OCC rule); MiCA (see MiCA).

Illustrative example: a UK PSP's plan

Illustrative example. The firm is invented.

A UK e-money institution pays out to sellers in USDC through a third-party provider. It checks whether its own activity falls within the new perimeter, takes advice, confirms its provider has applied in the window, and adds a clause requiring notice if the application is refused. It plans to review sterling stablecoin options once issuers are authorised.

Timeline

Q/A

Do foreign stablecoins like USDT become illegal in the UK?

The regime governs UK issuance and UK activities. How overseas stablecoins can be used by UK firms depends on the final rules and perimeter. Take advice.

Will UK stablecoins pay interest?

Not from the issuer. Issuers may not pass interest or income from the backing pool to holders, and may not route it through a third party (PS26/10, paras 10.2–10.5). Third parties may pay their own customers rewards from their own account, such as transaction-based rewards, provided no backing-pool income is passed on (para. 10.6).

What capital does an issuer need?

At least £350,000, or more where the fixed overheads or K-factor requirement is higher (FCA, PS26/12).

What happens to payments uses?

In April 2026 the government published a draft SI proposing to exclude activities involving UK-issued qualifying stablecoins from arranging and dealing, with the intention of bringing them under a modernised future payments regime (FCA overview). Watch this space.

Sources

• FCA, overview of cryptoasset regime policy statements (30 June 2026): https://www.fca.org.uk/publications/policy-statements/cryptoasset-regime
• FCA, PS26/10 stablecoin issuance: https://www.fca.org.uk/publication/policy/ps26-10.pdf
• FCA, PS26/12 prudential regime: https://www.fca.org.uk/publication/policy/ps26-12.pdf
• FCA, gateway to regulated crypto opens (30 September 2026): https://www.fca.org.uk/news/press-releases/fca-opens-gateway-regulated-crypto
• Bank of England, systemic stablecoins policy statement and draft rules (22 June 2026): https://www.bankofengland.co.uk/news/2026/june/boe-launches-policy-statement-and-draft-rules-on-regulating-systemic-stablecoins
• Bank of England PRA letter (18 May 2026): https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/letter/2026/innovations-in-the-use-of-deposits-emoney-and-regulated-stablecoins
• Cryptopru, Field Guide to PS26/10 (secondary): https://cryptopru.com/field-guide/papers/PS26-10.html