The Financial Conduct Authority has published a fresh set of proposals on stablecoins and crypto custody, marking a key step in shaping the UK’s future cryptoasset regime.
The consultation paper, released on Wednesday (28 May), outlines draft rules for the issuance of stablecoins, safeguarding customer assets and improving the financial resilience of firms operating in the crypto space.
The proposals follow extensive engagement with industry through roundtables and prior discussion papers, and aim to support the safe and competitive development of crypto markets in the UK.
Stablecoins — cryptoassets pegged to one or more fiat currencies — are viewed by the FCA as having potential to improve efficiency in payments and settlement, especially for cross-border transactions.
Under the proposed rules, stablecoins used for payments must maintain a stable value, and consumers should be given clear information about how the underlying assets are managed.
David Geale, executive director for payments and digital finance at the FCA, said:
“At the FCA, we have long supported innovation that benefits consumers and markets. At present, crypto is largely unregulated in the UK. We want to strike a balance in support of a sector that enables innovation and is underpinned by market integrity and trust.”
To further support innovation, the FCA is considering adding a specific focus on stablecoins to its innovation services in the coming months.
The regulator is also working closely with the Bank of England to create a coordinated regulatory regime.
The Bank will issue a complementary consultation later this year for stablecoins operating at systemic scale, addressing topics such as the return on backing assets.
Sarah Breeden, deputy governor for financial stability at the Bank of England, said:
“We welcome the proposals the FCA have published as part of building the UK’s stablecoin regime… We continue to work closely with the FCA to ensure the integrity of the UK’s stablecoin regime, including how firms transition within the regime.”
In addition to stablecoin issuance, the proposals also cover crypto custody services — where firms are responsible for safeguarding customers’ digital assets.
These firms would be required to ensure robust security and availability, and to mitigate the risks of failure that could lead to consumer harm.
The consultation follows HM Treasury’s draft legislation published in April 2025. Feedback is open until 31 July 2025, with final FCA rules expected in 2026.
