The Bank of England has published a policy statement and draft Code of Practice setting out how it will regulate “systemic” stablecoins, and the UK’s wider stablecoin authorisation regime is now set to take effect from 2027. The Financial Conduct Authority (FCA) has confirmed that firms will need FCA authorisation to issue a qualifying stablecoin, operate a cryptoasset trading platform, deal or arrange deals in cryptoassets, safeguard cryptoassets, or arrange cryptoasset staking, from 25 October 2027.
The rules affect stablecoin issuers directly, and by extension anyone who holds stablecoins as an asset or uses them to move money internationally. Under the Bank’s draft Code of Practice, a systemic stablecoin issuer may hold up to 70% of its reserves in short-term UK government debt, with the remainder — at least 30% — held as central bank deposits specifically to let the issuer meet redemption requests promptly. HM Treasury decides which sterling-denominated stablecoins count as “systemic” under Banking Act 2009 criteria; stablecoins that don’t meet that threshold remain under FCA supervision only. A temporary issuance guardrail caps each systemic stablecoin at £40 billion, a limit the Bank says is intended to be reviewed and eventually lifted. For readers specifically weighing stablecoins for cross-border payments or as a store of value: the Bank and FCA’s joint approach paper states that an overseas issuer of a sterling-denominated stablecoin must establish a UK legal entity to come under Bank of England rules, while for non-sterling stablecoins the Bank says it may defer to the issuer’s home-country regulator where outcomes are judged equivalent — meaning the protections a holder gets can depend on where the issuer is legally based.
The timeline, per the Bank of England and FCA: the Bank’s policy statement and draft Code of Practice went out for feedback with a 22 September 2026 deadline, and the Bank intends to finalise the Code of Practice “by the end of the year” (2026). The FCA opened its authorisation application window on 30 September 2026, and firms already operating in the UK market must complete their applications by 28 February 2027 under a transitional savings provision. The FCA’s full remit over stablecoin issuance and related cryptoasset activities becomes effective on 25 October 2027, which is the date generally cited as the regime’s “2027 start.”
On what happens next, the Bank of England says it “expects to consult on further provisions relating to [issuer] failure in due course” — meaning the rules for what happens if a stablecoin issuer collapses are not yet finalised. The FCA says it will consult further in October 2026 on targeted updates to its guidance, to reflect amendments the government is expected to make to the underlying legislation. FCA Executive Director for Payments and Digital Finance David Geale said the goal is a regime that “firms, consumers and international partners can trust” — a framing that leaves the consumer-facing detail (for example, exactly what redress a retail holder has if an issuer fails) dependent on the consultations still to come.
References
Bank of England – Bank of England launches policy statement and draft rules on regulating systemic stablecoins / Bank of England – Bank of England and Financial Conduct Authority’s approach to joint regulation of systemic stablecoin issuers / Financial Conduct Authority – Crypto firms get guidance on how the new regime applies
