UK dilutes stablecoin capital requirement in final crypto rulebook - Reuters

The UK’s final crypto asset regulatory framework has introduced a notable adjustment regarding stablecoin reserves. According to the finalized rulebook, issuers will no longer be bound by the originally proposed requirement to hold liquid assets equivalent to 100% of their coins in circulation. Instead, the Prudential Regulation Authority (PRA) will now determine firm-specific capital buffers based on individual risk assessments. This shift signals a move away from a rigid, one-size-fits-all liquidity mandate toward a more discretionary, supervisory approach.

For market participants, this dilution reduces the immediate operational burden on prospective issuers, potentially lowering the barrier to entry for launching a sterling-backed stablecoin. However, it also places greater emphasis on the qualitative judgment of regulators, meaning that capital adequacy will vary by business model. The development underscores the UK’s effort to balance innovation with financial stability, but the true test will be in how the PRA applies these discretionary powers in practice. Observers should monitor the authority’s subsequent guidance and any divergence from the stricter standards seen in the European Union’s Markets in Crypto-Assets Regulation (MiCA).