Public solicitation for collective opinions on the subject of stablecoins and cryptocurrency custody solutions by the Financial Conduct Authority.
United Kingdom's Financial Conduct Authority (FCA) has launched a public consultation on proposals to regulate the issuance of stablecoins and the safeguarding of cryptocurrencies.
The FCA's recent press release, published on May 28, comes as the United Kingdom moves closer to finalizing its regulatory framework for stablecoins and crypto custody. The regulator is seeking feedback from various stakeholders ahead of publishing the final rules in 2026.
The proposals come just a few weeks after the UK Treasury released draft legislation on the topics, which it published in April 2025. The public has until July 31, 2025, to submit their feedback.
The FCA views stablecoins as potential assets in the payments and settlement sector, due to their efficiency and speed. However, it emphasizes the need for proper regulation, with issuers obligated to provide clear information about their stablecoin's reserve backing.
Regulation for stablecoins and crypto custody extends the government's commitment to turning the UK into a hub for cryptocurrency innovation. David Geale, the executive director for payments and digital finance at the FCA, said, "Support for stablecoins and crypto custody signals our commitment to innovation in the sector, while ensuring market integrity and trust."
The FCA and the Bank of England are working together to establish clear regulations for the UK's cryptocurrency market. Sarah Breeden, deputy governor of the Bank of England, commented, "The proposals published by the FCA form an essential part of building the UK's stablecoin regime. We look forward to publishing a complementary consultation paper later this year, focusing on requirements for systemic stablecoins."
The consultation is open to stablecoin issuers looking to enter the UK market, payments providers, crypto custody platforms, industry groups, auditors, professional advisers, and consumer interest groups.
The FCA's approach to cryptocurrency regulation extends beyond stablecoins and custody, proposing a broader regulatory framework covering various cryptocurrency-related activities, as discussed in their earlier discussion papers published in May 2025.
In summary, the FCA is in the process of formalizing regulatory requirements for stablecoin issuance and crypto custody, requiring FCA authorization for firms conducting these activities. The regulator is coordinating with the Bank of England to address systemic risk aspects. The proposed regulatory framework is expected to be comprehensive, building on recent government drafts and aligning more closely with traditional financial regulation principles.
- The Financial Conduct Authority (FCA) is issuing regulations for the issuance of stablecoins and the safeguarding of cryptocurrencies, including requirements for crypto custody platforms.
- The FCA views stablecoins as potential assets in the payments and settlement sector, and is seeking clear information about their reserve backing from issuers.
- The proposed regulations for stablecoins and crypto custody are part of the UK government's commitment to turning the nation into a hub for cryptocurrency innovation.
- The FCA's regulatory framework for cryptocurrencies will cover various cryptocurrency-related activities, extending beyond stablecoins and custody.
