UK FCA Publishes Final Policy Position for Stablecoin Issuance

The UK Financial Conduct Authority (FCA) has published its final policy position for the new UK cryptoasset regime, specifically addressing stablecoin issuance. The policy statement, PS26/10, sets out rules for qualifying stablecoins issued in the UK, following consultation papers CP25/14 and CP25/41.

The FCA has largely maintained the framework it consulted on but made some changes to simplify the process. Notably, the agency did not expand the permissible backing assets or allow them to be held in multiple currencies to avoid increased volatility of the backing asset pool.

Other key changes include permitting use of an intragroup custodian for up to 20% of the backing asset pool and allowing a 5% excess in the backing asset pool. The FCA has also adjusted redemption timelines so that KYC checks can be completed before the T+1 redemption period begins.

Stablecoin issuers will have some flexibility in choosing how to enable redemption rights to transfer with a stablecoin, and requirements around unallocated backing funds and unallocated backing fund accounts have been removed. The FCA has also finalized disclosure requirements, particularly in relation to withdrawal rights and backing assets.