CoinDesk
The UK's Financial Conduct Authority on Tuesday published formal guidance cutting the proposed capital requirement for regulated stablecoin issuers to 1% of the total value of their tokens in circulation, down from the 2% it had previously consulted on. The FCA framed the move as making the prudential framework "more proportionate for larger issuers while maintaining the robustness of the overall regime," and the new floor is materially below the 2% equivalent requirement under the European Union's Markets in Crypto Assets (MiCA) regulation.
The guidance lands alongside looser framework for crypto exchanges, which under the new rules will need to set aside 40% of trading capital to cover potential losses and apply a 40% potential-loss haircut to the value of their collateral when lending or trading with counterparties. Together the two pieces sketch a deliberately lighter UK perimeter for digital asset activity than the bloc-level regime across the Channel.
Why it matters
The loosening follows the Bank of England's quiet reversal of its proposal to cap how much stablecoin any individual could hold, abandoning plans for a £20,000 (roughly $26,500) ceiling after sustained industry pushback. Two reversals in the same stretch shift the UK's posture from cautious first-mover to active competitor for the euro-denominated issuer base that has, until now, been priced toward MiCA. London is signalling it wants the balance sheets, the treasury functions, and the correspondent-banking relationships that come with regulated stablecoin issuance to sit inside its jurisdiction rather than Frankfurt, Dublin, or Paris.
Market impact
The competitive angle is real: a 1% capital buffer halves the regulatory carrying cost of issuance versus MiCA, and combined with simpler exchange requirements it gives UK-domiciled platforms and bank-led issuers a measurable basis-point advantage on the same volume of float. Watch whether major EU-domiciled stablecoin issuers publicly review their booking locations over the next two quarters, and whether the Bank of England accompanies the FCA move with faster authorisations for issuers already in its sandbox.
Frequently asked questions
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What did the FCA actually change for stablecoin issuers?
The FCA cut the proposed capital requirement for regulated stablecoin issuers to 1% of the total value of stablecoins in circulation, down from the 2% it had previously consulted on.
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How does the UK rule compare to the EU's MiCA?
The UK's 1% capital buffer is materially lower than the 2% equivalent requirement under the European Union's Markets in Crypto Assets regulation, giving UK-domiciled issuers a lighter prudential burden for the same volume of float.
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Did the Bank of England change stablecoin rules too?
Yes. The BoE walked back its proposal to cap how much stablecoin any individual could hold at £20,000 (around $26,500), abandoning the limit after sustained industry pushback.
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What did the FCA do for crypto exchanges under the same framework?
Under the new rules, crypto exchanges will need to set aside 40% of trading capital to cover potential losses and apply a 40% potential-loss haircut to the value of collateral when lending or trading with counterparties.
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Why is the FCA cutting capital buffers for stablecoin issuers?
The FCA framed the move as making the prudential framework "more proportionate for larger issuers while maintaining the robustness of the overall regime," and the lower buffer halves the regulatory carrying cost of issuance compared with MiCA.
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