The UK’s Financial Conduct Authority (FCA) has reduced its proposed capital requirements for stablecoin issuers after receiving feedback from the sector.
The change is included in the regulator’s final cryptoasset rulebook, which is set to bring more of the UK crypto market under FCA oversight for the first time, Reuters reported.
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Under the updated proposal, stablecoin issuers will need to hold capital equal to 1% of the total value of stablecoins they issue. This is a reduction from the 2% level set out in earlier plans.
The FCA said the revised requirement is intended to create a “proportionate” regime and help UK firms compete internationally.
FCA payments and digital finance executive director David Geale told journalists: “The feedback we got (was) that we’re starting a bit high.”
Officials also told the news agency that the earlier proposal had set the threshold too high for stablecoin issuers.
Alongside the capital adjustment, the FCA also made changes to other requirements. It will give firms more time in some cases to return funds to customers redeeming stablecoins. The regulator also removed certain public disclosure obligations that were included in previous drafts.
According to a report by The Guardian, crypto firms will be expected to develop and conduct their own stress tests based on internal risk assessments. They will then submit the results to the FCA each year.
For crypto exchanges, the FCA said it will adapt proposed trading rules to better reflect how crypto markets operate.
The new regulatory regime is scheduled to take effect in October 2027.
Under the framework, most stablecoins will fall under FCA supervision. Stablecoins viewed as systemic, including those that could be widely used for payments, will be overseen under a tougher regime led by the Bank of England.
The FCA’s issuer rules apply to sterling-denominated stablecoins, which represent a small share of the global stablecoin market.
