United Kingdom FCA Stablecoin Issuance and Cryptoasset Custody Regime

SI 2026/102 defines a qualifying stablecoin as a qualifying cryptoasset that seeks or purports to maintain a stable value in relation to a fiat currency, where fiat currency or other assets are held for that purpose. The new regulated activity of issuing a qualifying stablecoin focuses on UK-establishment activity involving offers or subscriptions, creation by or for the issuer’s group, redemption undertakings and the holding or arrangement of assets designed to maintain stable value.

In CP25/14, the FCA proposed specialist requirements for issuers of single-fiat-referenced qualifying stablecoins. The proposals cover product design controls, offer and redemption processes, backing-asset management and public disclosures. The FCA said its proposals are designed to support stability, transparency and reliability, while later consultations address cross-cutting conduct, firm standards and prudential requirements.

The FCA proposal would require qualifying stablecoins to be fully backed at all times by eligible assets, with a backing pool capable of meeting redemption needs and maintaining stability. The consultation proposed statutory trust treatment for backing assets, prompt segregation, use of an independent third party for safeguarding backing assets, daily reconciliations and public information about the backing pool.

For holders, the proposal centres on redemption at par, subject to specific exemptions and permitted fees. CP25/14 states that a qualifying stablecoin holder should be able to redeem with the issuer at any time, in money denominated in the reference currency and for the redemption sum. The proposal would also restrict redemption terms that impose minimum redemption quantities or make redemption onerous.

The custody limb applies to safeguarding qualifying cryptoassets or relevant specified investment cryptoassets, or arranging that safeguarding, on behalf of another person. The legislation treats a person as safeguarding where the person controls the asset in a way that would enable transfer of the benefit of the cryptoasset, including through holding or storing a private cryptographic key or other means of access.

CP25/14 focuses on situations where a firm safeguards cryptoassets on behalf of clients. The FCA expressly distinguished this from direct consumer self-custody, which the Treasury draft perimeter did not bring into the custody activity. The FCA proposed non-statutory trusts for client cryptoassets, separate individual or omnibus client wallets, adequate books and records, and business-day reconciliations against wallet and third-party holdings.

HM Treasury laid final legislation in Parliament on Dec. 15, 2025, and the Cryptoassets Regulations were made on Feb. 4, 2026. The FCA expects the new cryptoasset regime to come into force on Oct. 25, 2027, with firms able to request pre-application meetings from May 11, 2026 and with the application period expected to run from Sept. 30, 2026 to Feb. 28, 2027.

The FCA’s CP25/14 consultation closed on July 31, 2025. The regulator states that it will publish feedback and a Policy Statement by Summer 2026, and that final rules and guidance will be set out in policy statements before implementation. Editors should monitor FCA policy statements, the CP26/13 perimeter guidance process and HM Treasury’s April 2026 draft amendment process for changes before import or publication.