The UK’s Financial Conduct Authority (FCA) has identified the development of UK-issued stablecoins as a key priority for 2026, aiming to enable “faster and more convenient payments”.
In a letter to Prime Minister Sir Keir Starmer, the FCA states it plans to “finalise digital assets rules and progress UK-issued sterling stablecoins” next year. The regulator has invited companies intending to issue stablecoins in the UK to submit applications for its regulatory sandbox by 18 January 2026, providing an opportunity to test their products within a controlled environment.
The FCA is working closely with the Bank of England (BoE) to develop a regulatory model aimed at fostering the growth of stablecoin technology. Last month, the BoE released a consultation paper outlining a framework for systemic sterling stablecoins. Its proposals include allowing issuers to hold 60% of backing assets in short-term UK government debt, with the rest in BoE accounts, and exploring central bank liquidity support for stablecoin issuers during financial stress.
The FCA’s letter also highlights several other initiatives planned for 2026. These include overseeing the rollout of variable recurring payments, accelerating IPO applications, and introducing a roadmap for open finance, with an emphasis on improving SME lending.
Nikhil Rathi, chief executive of the FCA, says, “Our reforms help the UK maintain its global competitive edge in our world-leading wholesale markets, attract international investment, and lead on innovation in financial services. We will continue to embrace a bolder risk appetite to support growth, while maintaining our commitment to protect consumers and ensure market integrity.”
This year, the FCA made significant strides in advancing digital financial services. These include its collaboration with the government to launch PISCES, a private stock market initiative, and its partnership with Nvidia to create a sandbox for safe AI testing. The FCA also integrated with the Payment Systems Regulator following the latter’s dissolution as an independent body earlier this year.
Additionally, the FCA has expanded its presence to the US and Asia-Pacific, describing its plans as the creation of a “network of financial services attachés around the world”.
Moving forward, the regulator plans to deepen US-UK market integration through the Transatlantic Taskforce for Markets of the Future, which will look to provide “recommendations to enhance collaboration on capital markets and digital assets and other innovative financial activities”, according to a government statement.
Source: https://www.fintechfutures.com/
