UK Sets Out Joint Bank of England and FCA Rules for Systemic Stablecoins

The Bank of England and the Financial Conduct Authority have set out their approach to jointly regulating issuers of systemic stablecoins, marking a further step in building the UK's regulatory framework for digital money. Under the regime, the FCA will regulate all UK-issued qualifying stablecoins and, in time, their use in retail payments. Where a stablecoin becomes widely used in payments and could pose risks to financial stability, HM Treasury can designate it as systemic, after which its issuance will be jointly overseen by the Bank and the FCA. The two authorities said they have designed an integrated, two-part regime with proportionate requirements for both non-systemic and systemic issuers, aiming to provide clarity, consistency and a smooth transition between the two sets of rules. The Bank's rules focus on financial stability, reflecting the heightened risks when a stablecoin is used as money at scale, while the FCA's focus extends to consumer protection and market integrity. The framework reflects a shared commitment to support responsible innovation and growth while safeguarding the wider financial system.