UK’s Financial Conduct Authority (FCA) is looking for further views on its upcoming stableecoin regime, it said Wednesday.
“In support of the opportunities stablecoins present for financial services and the wider economy, FCA will investigate adding a specific focus on stableecoins to its innovation services in the coming months,” the FCA’s statement states.
FCA’s proposed rules are intended to ensure that stableecoins maintain their value and seek to reduce the likelihood of stablecoin and crypto parenting companies failing.
Stableecoins have been something regulators have seen carefully after the collapse of the algorithmic stableecoin Terrausd in 2022, resulting in investors losing their life savings.
FCA has created its new crypto regime since 2023. In 2023, it published a discussion document with suggestions for a stableecoin regime. The regulator has since raised its efforts to regulate the sector by releasing a number of discussion papers for the industry, and the British government is working to establish new legislation to ensure that the country’s supervisory authorities have all the powers they need to launch their new regimes for the digital asset sector.
FCA will collaborate with Bank of England to regulate stableecoins.
“For those stableecoins who expect to operate on a systemic scale, the Bank of England will publish a complementary consultation document later in the year, including responding to industry feedback to give some returns on support assets,” said Sarah Breeden, Deputy Governor of Financial Stability in Bank of England.
