UK Crypto Rulebook Cuts Stablecoin Capital Requirement To 1%

The UK’s crypto rulebook is starting to look more real, and stablecoin issuers now have a clearer idea of what they are dealing with. The Financial Conduct Authority has finalised a major set of cryptoasset policy statements and cut a key proposed capital requirement for stablecoin issuance from 2% to 1%.

That may sound like a narrow technical change, but it matters. Stablecoin regulation is where consumer protection, payments policy, competition, and crypto market structure all meet.

TL;DR

The FCA has reduced the coefficient for its stablecoin issuance capital requirement from 2% to 1%, saying the change makes the framework more proportionate while keeping the regime robust. The wider crypto rules are expected to come into force in October 2027, with firms such as trading platforms, custodians, intermediaries, stablecoin issuers, and staking arrangers needing authorisation to operate in the UK.

For the industry, the message is mixed but clearer than before. The UK is not taking a no-rules approach. It is trying to build a supervised market while adjusting parts of the framework that firms argued were too heavy.

Why The 1% Change Matters

Capital rules are not the most exciting part of crypto, but they shape who can compete. If requirements are too low, regulators risk weak issuers entering the market. If they are too high, only the largest players can afford to operate, and domestic stablecoin activity may move offshore.

The FCA’s move from 2% to 1% suggests the regulator heard industry feedback that the original calibration could have been too demanding. The agency framed the change as a way to make the prudential framework more proportionate for larger issuers without abandoning the core protections around stablecoin issuance.

That is an important signal for firms deciding whether the UK is worth building in.

The Bigger UK Crypto Picture

The stablecoin change sits inside a much broader regime. The FCA has said that until the new rules take effect, its crypto oversight remains limited mainly to financial promotions and anti-money laundering controls. Once the regime is live, crypto firms will need FCA authorisation across a wider set of activities.

That creates a runway. Firms have time to prepare, but they also have less room to pretend regulation is still hypothetical.

For stablecoin issuers, the UK market will remain challenging. Even a 1% requirement can be meaningful depending on issuance scale and reserve economics. But the reduction may make the framework more workable, especially for firms that want a compliant sterling stablecoin model.

The key question now is whether the UK can turn regulatory clarity into actual market activity. A rulebook only helps if serious firms decide to use it.

This report is based on information from the Financial Conduct Authority.

The timing also matters for exchanges and custodians. A 2027 start date gives the sector a planning window, but it also makes compliance work harder to ignore. Firms that want to stay in or enter the UK market now have a clearer target, even if the final operating burden remains significant.

This article was written by the News Desk and edited by Samuel Rae.