FCA Seeks Industry Feedback on Stablecoin Rules and Crypto Custody Framework

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Announced on May 28, 2025, these measures mark a significant step in shaping the country’s emerging regulatory framework for digital assets.

The consultation outlines how the FCA intends to regulate stablecoins—cryptoassets pegged to fiat currencies—aiming to ensure they maintain a stable value, enhance payment efficiency, and strengthen consumer protections. One focus of the rules is transparency around backing assets, requiring firms to clearly disclose how reserves are managed.

Driving Innovation While Ensuring Market Integrity

David Geale, the FCA’s executive director for payments and digital finance, emphasized the regulator’s dual mission: fostering innovation while preserving market trust.

“Crypto remains largely unregulated in the UK,” said Geale. “We want to support a sector that enables innovation and is underpinned by market integrity.”

To further support innovation, the FCA plans to incorporate stablecoins into its innovation services over the coming months.

Crypto Market Cools as Bitcoin Retreats from Post-Tariff Highs

The regulator is also working in close coordination with the Bank of England, particularly around stablecoins that may reach systemic scale. Deputy Governor Sarah Breeden confirmed the Bank will publish its own consultation later this year, responding to industry concerns such as allowing returns on backing assets.

Crypto Custody and Firm Resilience Also in Focus

The FCA’s proposal introduces new requirements for crypto custody providers, mandating that customer assets be held securely and remain accessible at all times. Additionally, the rules aim to reduce risks of firm failure through heightened operational standards and governance for companies dealing with stablecoins and custody services.

These proposals build on HM Treasury’s draft legislation released in April 2025, which laid the groundwork for a comprehensive UK crypto regulatory regime.