The UK Financial Conduct Authority (FCA) is in the midst of two consultations that will impact digital assets or crypto. As the world has taken a recent change in embracing digital asset innovation, the FCA wants to stay in the game, supporting responsible innovation and development.
Yesterday, the FCA launched a consultation on prudential rules and guidance for issuing qualifying stablecoins and safeguarding qualifying cryptoassets and the issuance of digital assets, including stablecoins.
The consultation paper (CP25/15) on a prudential regime for crypto firms seeks to establish rules to develop a safe, competitive, and sustainable cryptoasset sector. The consultation aims to “set appropriate standards that are proportionate, and which we will expect firms to meet.”
“Our regime will bring certainty, and firms and consumers will be able to place trust in qualifying stablecoins.”
The draft rules impact firms seeking authorisation to issue qualifying stablecoins and safeguarding qualifying cryptoassets.
Comments are due by July 21, 2025.
The consultation paper (CP25/14) is seeking input on the issuance of stablecoins as well as custody. The proposed rules aim to ensure regulated stablecoins maintain their value.
These stablecoins are digital assets that seek to maintain their value with reference to a fiat currency.
There can be other erstwhile stablecoins tied to other assets, and there have been some attempts to create algorithmic stablecoins.
Again, the goal is to support innovation and growth while protecting the public.
The guidance covers both issuers and custodians authorised by the FCA.
This consultation has the same deadline of July 31, 2025.
Recently, more emphasis has been placed on stablecoin issuance and regulation while interest in CBDCs has diminished. Industry insiders see an arms length relationship with the government as preferential to control of a digital asset by a central authority which can be easily monitored and perhaps abused.
