FCA halves stablecoin capital charge to 1% in final rules

The Financial Conduct Authority published its final stablecoin and crypto rules on 30 June, cutting the capital charge for issuers to 1% of the value of tokens in circulation. That is half the 2% the regulator proposed in its May 2025 consultation and half the level the European Union mandates under MiCA.

Firms issuing stablecoins in the UK will hold a cash surplus of up to 5% within their backing asset pools. The requirement to forecast redemptions has been dropped. Limited intragroup custody is allowed, subject to safeguards. The rules also set a joint approach with the Bank of England. The Bank replaced individual holding limits with a temporary £40bn issuance guardrail on 22 June.

Renuka Rawlins, director of policy and government relations at The Payments Association, called the capital decision the most important part of the package. “Most significant is the decision to halve the coefficient of the stablecoin issuance capital requirement from 2% to 1%,” she said. Her organisation had “consistently cautioned against importing overly conservative prudential frameworks that could stifle growth”. She described the change as “a major victory for proportionality, ensuring robust risk management without placing an unworkable capital burden on larger issuers”.

Brett Hillis, a partner at Reed Smith, read the rules as one move in a broader shift. “The focus on simplifying the rules and leaving room for innovation is incredibly welcome,” he said. “Coupled with the Bank of England’s rethink on stablecoin holding limits and the FCA’s positive paper on tokenisation, this marks the UK staking ground as a major crypto hub.”

Not everyone treated the easing as the whole story. Deep Patel, partner and UK payments lead at Capco, said the rules opened “a credible route into the UK payments ecosystem, only for firms who are able to operate with bank-grade controls”. Firms, he said, “will need to meet high standards on backing assets, safeguarding, redemption and operational resilience”. He placed the regime in a longer shift towards “different forms of money sitting alongside each other, including bank deposits, tokenised deposits, regulated stablecoins and potentially a digital pound”.

Nick Jones, founder and chief executive of Zumo, framed authorisation as a turning point. “It’s an exciting time for the crypto industry in the UK, also the end of an era: of offshore provision, of start-up style business processes, and of unregulated business models,” he said. Firms would soon be “regulated to the same stringent standards as UK financial services”, including annual stress tests to prove they can withstand major market shocks.

For some, the more important question is what the rules are meant to enable. Chris Kronenthal, president of FreedomPay, argued that the industry has often fixed on the wrong problem. “A far greater source of financial friction is the chronic, slow-motion outage of antiquated backend systems, like cross-border settlement,” he said. The real potential of stablecoins, he added, “isn’t just novelty; it’s the opportunity to overhaul these decades-old infrastructures, making global commerce more transparent, efficient, and reliable”.

A note of caution came from Anthony Yeung, chief commercial officer at CoinCover. “As adoption accelerates, institutions and consumers also need confidence that digital assets can be securely accessed, managed and recovered when things go wrong,” he said, pointing to lost credentials, compromised wallets and failures in key management as risks that “can undermine confidence in the ecosystem”.

The authorisation gateway opens on 30 September 2026, with applications accepted until 28 February 2027. A pre-application support service starts this month. The mandatory regime takes effect on 25 October 2027. The wider crypto framework, including the treatment of temporary issuance caps and wholesale settlement, is due to be settled before then.

For firms that meet the standards, the lower capital charge reduces the cost of issuing stablecoins in the UK relative to the EU. That could pull issuance volume toward London. Firms that cannot meet the bank-grade controls – or fail the annual stress tests – face a hard stop. The risk event is not the rule itself; it is the gap between the headline cut and the operational requirements that come with it. The wider crypto framework, including the treatment of temporary issuance caps and wholesale settlement, is due to be settled before then. crypto market analysis and best crypto brokers offer context on the competitive landscape.```json {