UK stablecoin issuers will get a lower capital requirement after FCA cut a key proposed rule from 2% to 1% of issued tokens.
The British financial regulator, the Financial Conduct Authority, said on Tuesday, June 30, that stablecoin issuers will have to hold capital equal to 1% of the total value of stablecoins they issue, down from the 2% level it had proposed earlier, Reuters reports.
The regulator said the change followed consultations with the industry and was meant to create a more “proportionate” regime that lets firms compete internationally.
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David Geale, the FCA’s executive director for payments and digital finance, said officials heard that the first version was too strict:
“The feedback we got [was] that we’re starting a bit high. [The final rules were based on] “evidence […] from industry.”
The change marks a softer final approach from the FCA as Britain tries to regulate crypto without pushing the industry offshore.
The Scale of the Cut
The UK issuer rule covers sterling-denominated stablecoins, not the main dollar coins such as USDT▼$0.9984 and USDC▼$0.9994.
For example, Tokenised GBP, the largest pound-backed stablecoin issued by BCP Technologies, has a market value of about £23.6 million, per data from CoinGecko, meaning a 2% capital rule would imply roughly £472,000 of required capital, while the new 1% rule would cut that to about £236,000.
Speaking with Reuters, Benoit Marzouk, chief executive and co-founder of BCP Technologies, said that even the lower 1% requirement remains challenging.
The FCA has softened other components of the proposal as well, such as allowing firms more time in certain redemption cases and dropping certain public disclosures.
The full UK crypto regime is expected to come into force in October 2027. Stablecoins will largely be regulated by the FCA. But tokens that become systemic or significant enough for payments will be regulated by a stricter regime at the Bank of England, Bitcoin Foundation reported earlier.
Read more: Stablecoins Market Still Mostly Serves Crypto Trading, BIS Says
