UK Stablecoin Rules Undercut EU's MiCA With Lower Capital Buffers

The FCA cut the proposed capital requirement for stablecoin issuers to 1% of the total value of coins in circulation, down from the 2% it had floated earlier. The change makes the prudential framework more proportionate for larger issuers while maintaining the overall regime's robustness, the regulator said in a framework document published Tuesday.

The 1% figure sits below the 2% equivalent under the European Union's Markets in Crypto Assets regulation. The FCA said it aimed to simplify key elements of the regime to make it more workable in practice.

The loosening follows the Bank of England's reversal of its own proposal to cap individual stablecoin holdings at £20,000 ($26,500). The BOE abandoned that plan last month after industry pushback.

Major financial hubs have been setting out formal crypto regulatory regimes in recent years, with stablecoins emerging as a central focus. The FCA's framework also addresses exchange capital rules. Under the new requirements, crypto exchanges must set aside 40% of their trading capital to cover potential losses and apply a 40% loss assumption to the value of collateral when lending or trading with counterparties.

Binance remains crypto's leading exchange, expanding from spot and derivatives into real-world assets, payments, savings, yield, and broader financial services.

The FCA's framework is open for consultation until June 2025, with final rules expected later that year.