How is the UK regulating stablecoins? FCA PS26/10 and Bank of England rules explained

The UK regulates stablecoins in two tiers. The FCA will authorise and supervise issuers of UK-issued "qualifying stablecoins" under final rules in PS26/10, published on 30 June 2026, and the Bank of England adds a second regime for sterling stablecoins that HM Treasury recognises as systemic. The legislation behind the FCA regime comes into force on 25 October 2027; the FCA's authorisation gateway opened on 30 September 2026, so firms are applying now for a regime that has not yet started.

Status checked on 4 November 2026. Sources: FCA: PS26/10 stablecoin issuance, FCA: overview of the cryptoasset regime policy statements.

What counts as a qualifying stablecoin?

The legal basis is the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (S.I. 2026/102). A qualifying stablecoin is a qualifying cryptoasset that seeks or purports to maintain a stable value in relation to a particular fiat currency, backed by fiat or other assets held for that purpose. Issuing one becomes a new regulated activity, and the Regulations come into force on 25 October 2027. legislation.gov.uk: S.I. 2026/102

The government describes issuance as three components: offering the coin, redeeming it and maintaining its value. A firm that carries on all three in the UK for a qualifying stablecoin is inside the issuance perimeter. GOV.UK: policy note on the draft amending instrument

PS26/10 covers UK-issued qualifying stablecoins. If you distribute, custody or trade a coin issued elsewhere, the rules that matter sit in the other policy statements in the package, PS26/9 to PS26/13.

What do the FCA's PS26/10 rules require of issuers?

The final rules keep most of the consultation's structure, with some practical changes:

• Full backing from the moment of minting, including coins the issuer holds itself.
• Backing in the coin's own currency. The FCA decided that a UK-issued qualifying stablecoin should only be backed by assets in its denominated currency, because FX risk could undermine the peg and timely redemption. The rule text is CASS 16.2.14R. FCA Handbook instrument FCA 2026/36
• A statutory trust. The backing asset pool is held on statutory trust for tokenholders, with a separate pool and trust for each stablecoin product.
• Custody inside the group is allowed. The FCA dropped its proposal that custodians be unconnected to the issuer's group, replacing it with safeguards.
• Redemption of any amount within T+1. Third parties such as exchanges can run redemptions, but the obligations stay with the issuer.
• Liquidity to match. The backing pool must be able to meet redemptions within that T+1 window.

T+0 or T+1: how fast must a UK stablecoin be redeemed?

Summaries conflict on this, so it is worth reading the primary text. For FCA-regulated issuers the answer is T+1, with a changed trigger. The FCA's final rules start the clock when the issuer receives the coin being redeemed in its wallet, not when a holder submits a request. Anti-money laundering and customer checks happen before the clock starts, and the deadline is disapplied only where meeting it would breach money laundering legislation. FCA: PS26/10

The Handbook wording is that redemption must be completed as soon as practicable and no later than the end of the business day after the day the coin is received. FCA Handbook: CRYPTO 2 Stablecoins

The faster figure belongs to the Bank of England's systemic regime. The FCA's PS26/10 material describes the Bank's requirement as redemption within a T+0 timeframe, and law-firm summaries of the Bank's draft Code describe redemption at par within 24 hours of a full request. Read the Bank's draft Code of Practice itself, as it was still a draft on 4 November 2026.

How does the Bank of England's systemic regime differ?

A sterling stablecoin that HM Treasury recognises as systemic is regulated jointly by the Bank and the FCA. Bank of England: joint regulation approach The Bank's policy statement of 22 June 2026 set the main terms:

• Backing: up to 70% in short-term UK government debt and at least 30% in central bank deposits at the Bank, up from the 60% maximum consulted on.
• No holding limits: the November 2025 consultation proposed limits of GBP 20,000 per individual and GBP 10 million per business. The final policy drops them for an initial maximum issuance of GBP 40 billion per systemic stablecoin, to be reviewed.
• Timing: the Bank said it intended to finalise the Code by the end of 2026, allowing regulated stablecoins to operate from 2027.

Source: Bank of England: policy statement and draft rules. For what these terms mean for product design, see the Bank of England's stablecoin rules are an operating model.

What is law now, and what is still proposed?

The draft amending instrument would treat assets backing qualifying stablecoins as outside the rules for collective investment schemes, alternative investment funds and e-money. legislation.gov.uk: draft explanatory memorandum Separately, the government plans to bring stablecoin payments into payment services regulation. Linklaters: stablecoins and payment services regulation For how machine and agent payments use stablecoins today, see can AI agents pay with stablecoins?

On the gateway, law-firm guidance reports that the application window closes on 28 February 2027 and that firms registered under the Money Laundering Regulations are not converted automatically. Winston & Strawn: the FCA gateway Confirm both on the FCA's site before planning around them.

What should payment and product teams do before October 2027?

1. Decide your role. Are you offering, redeeming and maintaining the value of a coin in the UK, or distributing someone else's? Only the first makes you an issuer.
2. Design redemption as an operation. T+1 from receipt means KYC must be complete before a holder sends coins back, and treasury must fund same-currency payouts every business day.
3. Separate the pools. One statutory trust and one backing pool per coin means separate ledgers and reconciliations under CASS 16.
4. Explain the protection accurately. A statutory trust is not deposit insurance. Is my money safe in a fintech app? sets out how the protections differ.
5. Compare instruments by holder rights, not brand; the stablecoin payments comparison lists the questions.

For the US approach, see what the GENIUS Act requires.

FAQ

Are stablecoins regulated in the UK yet?

The legislation is made and the FCA's rules are final, but the new regulated activities apply from 25 October 2027. The FCA's authorisation gateway has been open since 30 September 2026.

What is a qualifying stablecoin in the UK?

A cryptoasset that seeks to keep a stable value against a particular fiat currency by holding fiat or other assets. Issuing one in the UK becomes a regulated activity under S.I. 2026/102.

How quickly must a UK stablecoin issuer redeem?

Under PS26/10, any amount must be redeemed by the end of the business day after the issuer receives the coin. Systemic stablecoins under the Bank of England regime face a T+0 expectation.

Can a UK-issued stablecoin be backed by another currency?

No. The FCA's final rules require a UK-issued qualifying stablecoin to be backed only by assets in its own denominated currency.

Did the Bank of England drop stablecoin holding limits?

Yes. Its June 2026 policy statement replaced the proposed per-person and per-business limits with an initial issuance guardrail of GBP 40 billion per systemic stablecoin.