CoinDesk
The UK moved within days to pull its crypto regime closer to a workable institutional market, with the Financial Conduct Authority finalizing its crypto rules last month and the Bank of England scrapping proposed limits on holdings of fiat-pegged stablecoins. The central bank also lowered the reserve requirement issuers must hold at the Bank from 40% to 30%, a revision shaped directly by industry pushback against the more restrictive framework it set out in November 2025.
That earlier proposal would have capped individual systemic sterling stablecoin holdings at £20,000 and business holdings at £10 million, numbers the industry called unworkable for scale. The FCA, meanwhile, had been criticized for slow authorizations, opaque conduct expectations, and FinProm rules that made compliant marketing difficult. Combined, those frictions had left the UK visibly behind the EU's MiCA framework and the US's GENIUS Act, both of which have already moved from consultation to enforcement.
Why it matters
The shape of the rollback is what makes this read as a regime shift rather than a tweak. Reserve requirements were cut by a quarter of the original figure, holding caps were removed outright, and the FCA committed to consult later this year on how its rules will apply once a stablecoin issuer is designated systemic by the Treasury. The cross-department coordination between the Bank and the FCA has historically been a sticking point for firms navigating a split mandate, and the willingness to adjust on industry feedback is the strongest signal yet that London wants to compete for the institutional crypto business already flowing to Frankfurt, Brussels and New York.
Benchmark data underlines the cost of the delay. Per the Visa and Dune Beyond Dollarization report, unique holders of non-dollar stablecoins grew 30x between January 2023 and February 2026, driven mostly by real-world payments, settlement and payroll rather than speculation. Under MiCA, euro stablecoin transfer volume climbed from $270 million to $8 billion a month once stablecoin-specific rules took effect.
Frequently asked questions
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What exactly did the Bank of England change on stablecoins?
The Bank scrapped the previously proposed limits on holdings of fiat-pegged stablecoins and lowered the reserve requirement issuers must hold at the central bank from 40% to 30%, a revision of the more restrictive framework it set out in November 2025.
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Why is the FCA's finalized crypto rules announcement significant?
The FCA finalized its crypto rules last month, covering capital requirements, admissions and disclosures, and the wider conduct framework, addressing long-standing industry criticism over slow authorizations, opaque expectations and unworkable FinProm marketing rules.
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How does the UK rollback compare with the EU's MiCA framework?
Under MiCA's stablecoin-specific rules, euro stablecoin transfer volume grew from $270 million to $8 billion a month, a benchmark UK industry figures cite when arguing that workable rules, not restrictive ones, unlock adoption.
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What is the timeline for UK crypto firms to comply?
The UK crypto industry is working toward an October 2027 mandatory authorization deadline under the new regime, with a series of industry consultations still to come before that date.
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What political risk does the UK crypto agenda face?
With a new Labour leader expected within weeks after Prime Minister Keir Starmer's resignation, continuity of the crypto framework through the leadership transition is the immediate test of whether the recent regulatory pivot survives contact with politics.
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