The UK stablecoin regime: what the FCA has set out
What is, and is not, a qualifying stablecoin
The definition sits in article 88G(2) of the Regulated Activities Order, as inserted by reg. 40 of SI 2026/102. A qualifying stablecoin is a qualifying cryptoasset where "(a) that cryptoasset seeks or purports to maintain a stable value in relation to a particular fiat currency ... and (b) fiat currency ... or other assets are held for the purpose of maintaining a stable value". Both limbs must be met.
Gold-referenced tokens are outside the definition
Article 88G(3) is the provision most commonly skipped, and it moves a whole class of product: "Where a cryptoasset seeks or purports to maintain a stable value in relation to an asset other than a fiat currency, the cryptoasset is not to be regarded as falling within paragraph (2)(a) even if the asset is expressed in terms of a fiat currency." A gold- or commodity-referenced token is therefore not a qualifying stablecoin, even though its price is quoted in pounds or dollars. Article 88G(4)(a) adds that the backing "other assets do not include the cryptoasset itself", which puts algorithmic, self-collateralised designs outside the definition too.
Neither exclusion makes the token unregulated. It may still be a qualifying cryptoasset under article 88F, so dealing, arranging, operating a trading platform and safeguarding all remain in scope. What falls away is the stablecoin issuance regime — usually a harder position for the issuer, not an easier one.
Issuance is regulated, but it is not a payment service or a deposit
Issuing a qualifying stablecoin in the UK is a specified activity under article 9M. Two provisions stop it colliding with older perimeters: reg. 49 of SI 2026/102 provides that article 9M issuance does not constitute a payment service, and new article 9AZA provides that "a sum is not a deposit ... if it is immediately exchanged for qualifying stablecoin", removing the deposit-taking overlap on the on-ramp.
The backing asset rules
PS26/10, published on 30 June 2026, contains the FCA's final rules for UK-issued qualifying stablecoins:
- The backing asset pool is held on a statutory trust for tokenholders, with a separate pool and separate trust for each stablecoin product, and all minted tokens fully backed including those the issuer itself holds (paras. 4.2 to 4.3)
- Core backing assets are short-term deposits and short-term government debt (para. 3.1); an expanded set — longer-dated government debt, public debt CNAV money market funds and repo — requires prior notification to the FCA and additional systems, controls and expertise (para. 3.2)
- An on-demand deposit requirement of 5% of the backing pool (para. 3.1)
- A core backing asset requirement set at the higher of 5% of the pool or the highest daily redemption percentage over the past 180 redemption days (para. 3.11), recalculated every redemption day rather than every 14 (para. 3.12)
- Single-currency backing: a UK-issued qualifying stablecoin should be backed only by assets in the denominated currency (para. 3.21)
- Intragroup custodians are permitted for up to 20% of the pool, with an exemption where compliance would be disproportionate given the pool's size and the safety of the third-party custodians (para. 5.6)
Redemption and yield
Redemption runs to T+1: a payment order must be placed to an account in the holder's name by the end of the next business day (para. 7.2). The FCA moved the start of that clock so it runs from the issuer receiving the token in its wallet rather than from a redemption request, putting AML checks before the countdown rather than inside it (para. 7.7). Issuers may not pass interest or income from the backing pool to tokenholders (para. 10.5), though third parties may pay rewards to their own customers out of their own resources (para. 10.6). A model built on sharing backing yield does not survive that rule.
Capital
The permanent minimum requirement for stablecoin issuance is GBP 350,000 and K-SII was finalised at 1% of stablecoins issued (PS26/12, para. 3.41).
The live gap: distribution
HM Treasury published a draft amending SI on 21 April 2026, with submissions closing on 22 May 2026. It would insert article 9Z10A, excluding from the dealing and arranging heads the transfer of a relevant qualifying stablecoin to another person and its exchange for another asset, including money or another qualifying stablecoin. Remitting or selling UK-issued qualifying stablecoins would then not need dealing or arranging permission. Safeguarding would still need article 9N, and the exclusion would not reach lending or borrowing.
As at 16 August 2026 that instrument has not been made, and the gov.uk policy note carries no update since publication. Anyone scoping a stablecoin distribution business off SI 2026/102 alone is scoping against a perimeter the Treasury has already proposed to move. Check on legislation.gov.uk whether the amendment has been made before relying on the current text; commentary has largely not priced it in.
The checklist behind this article
Our UK gateway readiness checklist works through the authorisation file item by item, including the stablecoin heads above, with each item cited to a regulation, article or policy statement paragraph, each figure marked as instrument text or as reporting of it, and open items — the amending SI among them — left marked open rather than guessed. USD 149, with updated editions free as the position develops.
If you issue a single fiat-referenced stablecoin and do nothing else, the checklist is enough on its own. If your token references something else, or you distribute as well as issue, the 48-hour gap check takes your specific facts.