FCA Halves Stablecoin Capital Charge, Raising Question for Banks

The UK's Financial Conduct Authority (FCA) has announced final rules on cryptoassets, including stablecoins. The FCA has halved the capital charge for stablecoin issuance, from 2% to 1%. According to Dan Holmes, VP of product planning and strategy at Feedzai, this signals that stablecoins are no longer being treated as a fringe asset class.

Stablecoins are being pushed towards being regulated as day-to-day money, forming the conversation about what currency looks like over the next decade. The reduced capital charge lowers the cost and entry for growth, putting the UK in a competitive position relative to its global peers.

Holmes emphasizes that the question for banks isn't whether stablecoins become a meaningful payment rail, but whether they can handle the volume through their existing risk infrastructure. Firms treating this as another payment type will absorb the growth, while those treating it as a side project will carry the long-term risk as data and decisions become disconnected.

The key to scaling crypto banking is trust, which requires controls consumers take for granted on current rails to exist on new ones. This includes real-time transaction monitoring, identity verification, fraud detection, and liability cover if something goes wrong.