UK Regulators Unveil Comprehensive Plans for Stablecoin Regulation

The Bank of England (BOE) and the Financial Conduct Authority (FCA) have published discussion papers outlining their plans to regulate stablecoins and the wider crypto sector in the UK. The BOE will oversee "systemic stablecoins" that could potentially disrupt financial stability, while the FCA will regulate the broader crypto sector. The proposals aim to bring stability and oversight to the growing cryptocurrency industry, following the collapse of stablecoin empire Terraform Labs and the emergence of stablecoin proposals from Big Tech companies like Facebook (now Meta) and PayPal. The BOE's proposals would allow companies to issue payments-focused, fiat-backed stablecoins in the UK if approved. The FCA's plans require stablecoin issuers to seek authorization and ensure appropriate asset backing. The regulators aim to consult on final rules by mid-2024 and implement stablecoin regimes by 2025.