UK financial regulators are accelerating their work on a full regulatory regime for sterling-issued stablecoins, positioning the country to play a central role in shaping digital payments over the next year.
Both the Financial Conduct Authority (FCA) and the Bank of England (BoE) have identified stablecoin oversight as a core priority for 2026, building toward a coordinated framework for non-systemic and systemic issuers.
FCA Pushes Ahead With Stablecoin Payments
The FCA’s focus on stablecoin adoption is part of a wider effort to modernize the UK’s payments landscape and strengthen competitiveness. The regulator will take responsibility for solo-regulating non-systemic stablecoins, with an emphasis on consumer protection, conduct standards, and fair competition. As part of its roadmap, the FCA plans to finalize digital asset rules by 2026 and advance the development of UK-issued sterling stablecoins.
The regulator has also opened a stablecoin-specific cohort within its Regulatory Sandbox, giving firms a controlled environment to test their products under evolving rules. Applications for this sandbox remain open until January 18, 2026, making it a key early milestone for companies exploring UK-based stablecoin issuance.
Bank of England Designs Rules for Systemic Coins
The Bank of England is operating on a parallel track, developing a prudential framework for what it describes as systemic stablecoins, tokens with the potential to influence financial stability due to their widespread use in retail or corporate payments. Under its proposals, systemic issuers would face stricter risk-management obligations and may be permitted to hold a share of their backing assets in short-term UK government debt, aligning them more closely with traditional payment infrastructure.
The BoE’s consultation process for these proposals runs until February 10, 2026, giving industry participants a window to respond before final rules are drafted.
Coordinated Oversight for a Growing Market
Although the global stablecoin market has reached roughly $308 billion, sterling-pegged stablecoins remain a niche segment at under $6 million in circulation. Regulators aim to change that by offering clarity, investor protections, and a trusted regulatory environment, conditions intended to attract new issuers and stimulate domestic growth.
The FCA and BoE are working toward a joint approach document expected later in 2026, which will outline how the two regulatory regimes will interact in practice. This collaboration is designed to smooth the transition for firms that may move between non-systemic and systemic oversight as their products scale.
Key Dates to Watch
- •January 18, 2026: Deadline for FCA sandbox applications.
- •February 10, 2026: End of the BoE consultation period for systemic stablecoins.
- •End of 2026: Publication of final rules and expected launch of the full UK stablecoin regulatory regime.
With this roadmap, the UK is signaling its intention to become one of the first major jurisdictions with a dedicated, multi-layered regulatory system for stablecoins, balancing innovation incentives with financial stability protections as the digital finance landscape evolves.