The UK is poised to embrace overseas stablecoins with new regulations under the watchful eye of the Bank of England, FCA, and PSR, focusing on minimizing risks and safeguarding consumers. Learn what this means for the world of finance.
The United Kingdom is gearing up to introduce groundbreaking regulations that will greenlight authorized financial firms to collaborate with overseas stablecoins. This move, under the supervision of the Bank of England, the Financial Conduct Authority (FCA), and the Payment Systems Regulator (PSR), seeks to mitigate potential risks while ensuring the safety of consumers.
The UK Stablecoins Regulation targets fiat-backed stablecoins, primarily those used for payments. These regulations have a two-pronged approach. Firstly, they govern the use of fiat-backed stablecoins in payment systems. Secondly, they oversee the issuance and custody of such stablecoins, regardless of their intended use.
The FCA is exploring options for integrating overseas stablecoins into UK payments for goods and services. This approach envisions FCA-authorized payment arrangers ensuring that these stablecoins meet the FCA’s standards for use in UK payment systems.
Furthermore, payment services involving fiat-backed stablecoins will be subject to FCA rules and guidance, particularly those related to authorized or registered payment institutions. However, stablecoins used on crypto exchanges will face regulation in the later stages of crypto asset regulation.