UK’s FCA Requests Feedback on Stablecoins and Crypto Custody Regulations
The U.K. Financial Conduct Authority (FCA) is seeking feedback on its upcoming stablecoins regime. Key points include:
- The FCA aims to explore stablecoins' potential in financial services and the economy.
- Proposed rules will focus on maintaining stablecoin value and reducing risks of failure for stablecoin and crypto custody firms.
- The regulatory interest in stablecoins intensified after the collapse of the algorithmic stablecoin terraUSD in 2022, which led to significant investor losses.
- Since 2023, the FCA has been working on its new crypto regime, releasing discussion papers and collaborating with the U.K. government on related legislation.
- The Bank of England will assist in regulating stablecoins and plans to release a consultation paper later this year addressing systemic scale and asset backing returns.