The United Kingdom government has released an update on its plans to regulate fiat-backed stablecoins. The aim is to facilitate and regulate the use of these stablecoins in the country’s payment chains. The government intends to introduce specific legislation in 2024, which will bring the regulation of fiat-backed stablecoins under the Financial Conduct Authority’s (FCA) mandate. Local companies will be authorized by the FCA and responsible for ensuring that overseas stablecoins meet local standards. Non-fiat-backed stablecoins, including algorithmic ones, will not be allowed in regulated payment chains, but the document does not impose a direct ban. Instead, it states that these transactions will remain unregulated and subject to the same requirements as unbacked cryptoassets. The FCA will have the authority to demand that stablecoin issuers hold all reserve funds in a statutory trust, with the terms of the trust set out in the FCA’s rules. In the event of a firm’s failure, the UK stablecoin issuers will face procedures under the Insolvency Act 1986. The regulation of crypto and stablecoins falls under the Financial Services and Markets Act, which was passed by the British Parliament in June 2023. The Treasury’s document refers to this act as the FCMA 2023, and it grants powers to the Treasury, the Bank of England, and the FCA to regulate crypto and stablecoins.

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Information	Details
Geography	Europe
Countries	🇬🇧
Sentiment	neutral
Relevance Score	1
People	None
Companies	HM Treasury, Insolvency Act 1986, Financial Conduct Authority (FCA), Bank of England
Currencies	None
Securities	None