- Stablecoins pegged to the British sterling will be a key priority for the FCA.
- The initiative is part of a multi-pronged approach to spur growth.
- There are just $6 million in sterling-based stablecoins on the market.
The UK Financial Conduct Authority announced that stablecoins — cryptocurrencies pegged to a fiat currency, such as the dollar or pound — will be a major priority moving forward.
Its new priority is part of a broader push to enhance the UK’s growth, which also includes initiatives to digitalise financial services, boost international trade competitiveness, and expand lending services to small businesses.
In 2026, the FCA plans to “finalise digital asset rules and progress UK-issued sterling stablecoins,” Nikhil Rathi, the agency’s chief executive, wrote in a note to British Prime Minister Keir Starmer.
“We will continue to embrace a bolder risk appetite to support growth, while maintaining our commitment to protect consumers and ensure market integrity,” Rathi said.
UK shifts gears
The move is just the latest in Great Britain’s efforts to revitalise its position in the digital asset space.
Unlike the US and the European Union, the UK has lagged behind many other regions worldwide.
The UK’s sluggishness in regulating the crypto industry has left it behind these regions, Bivu Das, the UK general manager at crypto exchange Kraken, told DL News in October.
“At least they’re on the road, but we’re sitting there on the hard shoulder, waiting to see if the other two crashes before deciding what to do,” Das said.
Now, that’s changing fast.
In November, the FCA also announced the launch of a sandbox initiative and invited stablecoin firms to apply. As participants, those firms would have sway over how the region’s rules on sterling-pegged cryptocurrencies would evolve.
Interested firms have until January 18 to apply.
“We will further adapt our supervisory approach, with more tailoring to firms’ size and type, accepting some things will go wrong and prioritising the most egregious harms,” Rathi said on Wednesday.
$6 million
Their work is cut out for them.
Stablecoins pegged to sterling account for less than $6 million of a market that has ballooned to $308 billion, with the vast majority being dollar stablecoins, according to DefiLlama.
Meanwhile, the Bank of England is also finalising rules for its supervisory regime for payment stablecoins.
The central bank indicated that they could “make payments faster, cheaper, and more efficient,” adding that they could be widely used across the country.
Stablecoins aren’t the only blockchain-based technology the FCA is hoping will spur growth, either.
Alongside advancing artificial intelligence use cases, Rathi also suggested that the agency is prioritising migrating traditional assets to blockchain.
“We will also enable our world-leading asset management sector to tokenise their funds, driving efficiencies and competition,” he said.
Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.
