The Financial Conduct Authority has published its final rulebook for crypto asset firms and scaled back a contentious stablecoin capital requirement after industry consultation.
The FCA proposed a 2% capital buffer for stablecoin issuers in draft rules released earlier this year. That threshold has now dropped to 1% in the finalised version. The shift signals the regulator's willingness to adjust its stance when firms demonstrate operational or financial constraints, though the FCA stopped short of eliminating the requirement altogether.
Stablecoin issuers operating in the UK will still face obligations to hold additional capital beyond their reserve holdings. The 1% figure applies to liabilities issued to consumers and reflects what the regulator believes firms can absorb as a cushion against operational losses or technical failures that might prevent rapid redemption.
The FCA's final rules also lock in existing expectations around stablecoin reserves: issuers must hold sufficient assets to back every coin in circulation at redemption value. Those assets face segregation and audit requirements designed to prevent commingling with operational funds.
The broader rulebook covers market abuse, transaction reporting, custody standards, and permissions for firms already operating under the interim crypto licensing regime. Firms that have been granted temporary permissions while awaiting full authorisation will transition into the final framework on a deadline yet to be confirmed by the FCA.
Industry groups and individual stablecoin operators had flagged concerns that the 2% figure was misaligned with risk profiles, particularly for issuers that already hold nearly 100% reserves and face minimal operational margin pressure. The FCA's reduction suggests those warnings found traction, though no firm has disclosed whether it triggered changes to business plans or funding models.
The rulebook now enters the implementation phase. Firms must adjust systems, governance, and financial reporting to meet the new standards. The FCA has signalled no imminent enforcement action against firms already in the interim regime, but clarity on transition deadlines will be critical for capital planning.