FCA Publishes Stablecoins, Digital Asset Rules

The UK’s financial market regulator, the Financial Conduct Authority, has published its five policy statements about digital assets, including stablecoins, on which it took a more lenient line than it had planned, easing reserve and disclosure requirements after a forceful industry pushback.

The new rules come into effect in October next year but firms will be required to secure authorisation before the deadline. Until then, crypto oversight will continue to be limited to financial promotions and AML controls.

The statements bring crypto and digital asset markets under the FCAs supervision for the first time, with firms now having to obtain authorisation from the regulator to continue operating within the UK. The authorisation period opens 30 September and runs to the end of February. Firms can start preparing via the regulator’s pre-application service from July.

Crypto firms, including trading platforms, intermediaries, custodians, stablecoin issuers, and firms arranging staking must obtain FCA authorisation to operate in the UK. The new framework also sets out rules for stablecoins, with a set of “clear, strong and transparent standards.” 

David Geale, executive director of payments and digital finance at the FCA says, “This is a significant moment for crypto regulation in the UK. We’ve created a framework that doesn’t force firms to choose between regulatory certainty and room to innovate – this regime means they can have both in a stable, competitive home to build and grow. For consumers, it means firms will be held to similar standards to other financial providers, though we can’t regulate away risk.”