The United Kingdom is gearing up for a significant regulatory shift in the world of stablecoins, with a suite of documents published on November 6th, 2025, providing insights into the regulators' thought process. The Financial Conduct Authority (FCA) and the Bank of England (BOE) have both released discussion papers on the subject, accompanied by a letter from the BOE's Prudential Regulatory Authority (PRA) to CEOs of deposit-taking institutions and a "cross-authority roadmap" to tie everything together.
The flurry of releases was preceded by a brief document from His Majesty's Treasury on October 30th, outlining plans for regulation. The FCA paper delved into the same topic in much more detail, suggesting that stablecoin regulation is the first step towards broader crypto-asset regulation.
The FCA's discussion paper outlined potential retail and wholesale stablecoin use cases, including auditing and reporting, the backing of coins owned by the issuer, and the independence of the backing assets' custodian. The paper focused on how the principle of "same risk, same regulator outcome" could be applied, proposing the use of the existing client assets regime as the basis of rules on redemption and custodianship.
The BOE paper, on the other hand, examined the use of sterling-based retail-focused stablecoin in systemic payment systems. It considered transfer function and requirements for wallet providers and other services, partially overlapping with the FCA's discussion of stablecoin issuers and deposit protection.
The BOE PRA letter emphasized the need for a clear distinction between "e-money or regulated stablecoins" and other types of deposits. Deposit-taking institutions should limit their innovation to deposits, and issuance activities should have distinct branding. The PRA advised that an issuer wanting to take deposits as well should move quickly and involve the PRA in the process.
The BOE roadmap included a timeline, with an implementation date of 2025. This timeline suggests that the UK is taking a measured and thoughtful approach to the regulation of stablecoins and, by extension, other crypto-assets.
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In conclusion, the UK's forthcoming stablecoin regulation represents a significant step towards broader crypto-asset regulation. The thoughtful and measured approach taken by the FCA and BOE suggests a commitment to ensuring that the UK remains at the forefront of the rapidly evolving world of digital currencies.