The United Kingdom is moving closer to establishing a clear regulatory framework for stablecoins, a step widely seen as an important step to the nation’s ambition to become a global hub for digital assets.
Thirty executives from top crypto firms have now written to Finance Minister Rachel Reeves urging a national stablecoin plan, warning the UK risks ceding leadership to faster-moving jurisdictions if it hesitates.
The letter challenges the UK’s legal framing of stablecoins as merely “crypto-assets concerning fiat currency,” arguing that this misses their function as core payment rails in digital markets. It likens the current wording to calling a cheque “paper regarding money,” and asks the government to recognise stablecoins as critical financial infrastructure for settlement, remittances, and liquidity.
Also, the authors point to the tiny footprint of pound-pegged stablecoins, about £461,224 in total, versus a global stablecoin market above $280 billion, as evidence that policy uncertainty is holding the UK back.
Regulators are already on the case. The Financial Conduct Authority’s consultation CP25/14 sets out proposed requirements for issuing qualifying stablecoins and safeguarding crypto assets, with feedback windows that ran through late July.
Although the Bank of England will create rules for systemic payment tokens, the FCA’s proposals outline conduct, disclosure, and custody standards to protect consumers while allowing responsible innovation. Furthermore, officials have flagged that final rules will follow after consultation, with implementation sequencing expected in 2026.
Clear rules could enable UK banks, asset managers, and fintechs to treat stablecoins like cash-equivalent settlement assets, bridging on-chain finance with London’s trading, FX, and payments plumbing. However, the path is delicate: policymakers must ring-fence prudential risks, ensure one-to-one backing for fiat-referenced coins, and coordinate with payments law to prevent regulatory arbitrage across issuers and custodians.
The open letter doesn’t set policy; it crystallises market expectations: the UK needs a unified, nationally articulated stablecoin strategy to anchor confidence, crowd in institutional capital, and keep London competitive as other hubs advance their frameworks. If ministers and regulators deliver timely, proportionate rules, the City could become a preferred venue for compliant stablecoin issuance, custody, and real-economy use cases.
