Britain has made a major move to attract stablecoin businesses. The Financial Conduct Authority has finalized rules that cut the capital buffer for key issuers from 2% to 1%. This halves their costs and places the UK's requirement at exactly half of what the European Union demands.
The overhaul also removes redemption forecasting obligations and allows backing pools to hold up to 5% in excess assets. The framework still requires full 1:1 backing by high-quality liquid assets and statutory trust protections for customer funds.
Crucially for institutions, the FCA reversed a proposed £20,000 individual holding limit. There is now no ceiling on how many stablecoins a UK resident can hold, making these instruments viable for large-scale trading and settlement.
These rules take effect in late 2027. The move signals the UK's intent to become a premier hub for digital finance, directly competing with the EU's stricter MiCA framework.