The FCA declared sterling stablecoins a top priority for the UK in 2026. Industry players are optimistic rule-making will avoid the pitfalls seen in other jurisdictions. First, the Bank of England would keep at least 40% of a stablecoin’s backing assets with the BoE, with the remainder in higher-yielding gilts. Second, customers should be able to redeem one stablecoin for £1 in fiat by the end of a business day.
Third, the Bank of England has proposed a strict rule to cap the amount of stablecoins an individual can hold between £10,000 and £20,000, with businesses capped at holding £10 million. Fourth, stablecoin providers must operate using a legal trust so that if the company goes bankrupt, the money belongs to the holders rather than the creditors. And finally, regulators in the UK are mirroring the US by prohibiting — at least for now — stablecoin issuers from dishing out yield to their holders. The FCA has named sterling stablecoins a top priority for the United Kingdom in 2026, signaling regulatory focus as policymakers map a framework.
Regulators from the FCA and the Bank of England outlined five pillars to balance stability, consumer protection, and innovation, with the aim of avoiding pitfalls seen in other jurisdictions. Under the plan, the Bank of England would back at least 40% of a stablecoin’s assets, while the remainder would be held in higher-yielding gilts. Redemption rules would require that a stablecoin be redeemable for £1 in fiat by the end of each business day. A cap on holdings would restrict individuals to between £10,000 and £20,000, with businesses allowed to hold up to £10 million.
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