UK Crypto Rulebook Cuts Stablecoin Capital Requirement To 1%

That may sound like a narrow technical change, but it matters. Stablecoin regulation is where consumer protection, payments policy, competition, and crypto market structure all meet.

For the industry, the message is mixed but clearer than before. The UK is not taking a no-rules approach. It is trying to build a supervised market while adjusting parts of the framework that firms argued were too heavy.

The FCA’s move from 2% to 1% suggests the regulator heard industry feedback that the original calibration could have been too demanding. The agency framed the change as a way to make the prudential framework more proportionate for larger issuers without abandoning the core protections around stablecoin issuance.

That is an important signal for firms deciding whether the UK is worth building in.

The stablecoin change sits inside a much broader regime. The FCA has said that until the new rules take effect, its crypto oversight remains limited mainly to financial promotions and anti-money laundering controls. Once the regime is live, crypto firms will need FCA authorisation across a wider set of activities.

That creates a runway. Firms have time to prepare, but they also have less room to pretend regulation is still hypothetical.

For stablecoin issuers, the UK market will remain challenging. Even a 1% requirement can be meaningful depending on issuance scale and reserve economics. But the reduction may make the framework more workable, especially for firms that want a compliant sterling stablecoin model.

The key question now is whether the UK can turn regulatory clarity into actual market activity. A rulebook only helps if serious firms decide to use it.

This report is based on information from the Financial Conduct Authority.