The Bank of England and the Financial Conduct Authority have set out how they will share responsibility for regulating the largest stablecoins, with the Bank taking the backing assets and the FCA keeping conduct and consumer protection. 

The joint approach, published on 30 June 2026, explains how a stablecoin issuer moves from FCA supervision alone to joint regulation once its coin is judged large enough to matter to the financial system. It completes the UK’s cryptoasset framework.

Who covers what

The Bank leads on the backing assets and safeguarding arrangements that determine whether a stablecoin can always be redeemed. The FCA leads on conduct, consumer protection, and the issuance, custody and admission-to-trading activities that already sit inside its wider cryptoasset regime.

For an ordinary stablecoin issuer, the FCA remains the single regulator. The Bank only joins once HM Treasury formally designates a coin as systemic, so the two-regulator model applies to a small number of large stablecoin issuers rather than the market as a whole.

The Bank softened its rules

The Bank set out its own requirements for sterling-denominated systemic stablecoins in a policy statement and draft Code of Practice in June 2026, easing the terms it had floated in its earlier consultation. It dropped proposed holding limits that would have capped individual holdings at £20,000 and business holdings at £10 million. In their place it set a temporary guardrail on total issuance, initially £40 billion per systemic stablecoin product, according to legal analysis of the statement.

 The Bank also revised the backing rules, reducing the share of reserves an issuer must hold as unremunerated deposits at the Bank and allowing more of the backing to sit in short-dated UK government debt. That lets issuers earn a return on a larger slice of their reserves. The Bank is consulting on the draft Code of Practice, with feedback due by 22 September 2026.

Industry flags the overlap

David Reilly, who leads payments and retail banking work at the reconciliation software firm AutoRek, said the two regulators had “set out a sensible division of labour”, but that the overlap carried a cost. “For firms, that overlap means the same operational data now has to satisfy two sets of supervisory expectations,” he said, adding that reconciliation needed to be “as automated as possible” because a stablecoin moving through its lifecycle involves “state changes across ledgers” rather than simple transfers.

Two stablecoins can trade at the same value without being interchangeable, Reilly said. “USDC and USDT both trade at a dollar. But operationally, they have distinct issuers, reserve models, redemption mechanics and points of failure. They trade at parity but are not fungible.” That difference, he added, does not show up on a balance sheet unless you are specifically looking for it, exactly the exposure a backing-asset regulator is designed to catch.

A market still to prove itself

The UK’s sterling stablecoin market is, for now, small. Reilly described stablecoin issuing in the UK as “a very embryonic market”, noting that the dollar coins USDC and USDT “totally dwarf anything else” and that there is “no widely adopted GBP stablecoin in use”. The regime, and the Bank’s softened backing rules, are designed to change that, much as the GENIUS Act and the Markets in Crypto-Assets regulation are doing in the US and EU.

Matthijs Boon, chief partnership officer at the payments firm Equals, said it was “encouraging that regulatory barriers to sterling-denominated stablecoins have been lowered”, though regulation was “only part of the story”: mainstream use would also depend on regulated payment partners able to manage the operational complexity of a new payment method.

What happens next

The UK’s model differs from both the EU, where MiCA routes significant tokens to the European Banking Authority, and the US, where the GENIUS Act builds stablecoin rules around banking regulators rather than a conduct-and-stability split. The Bank’s Code of Practice is due to be finalised by the end of 2026, and the wider cryptoasset regime comes into force on 25 October 2027, giving issuers a runway to build reporting and reconciliation that holds up for both regulators from the start.

For the full framework, including who else needs FCA authorisation, see our explainer on the UK cryptoasset regime, and our report on the final FCA crypto rules.