On 30 October 2023, HM Treasury (HMT) issued its long-awaited policy document on the regulation of fiat-backed stablecoins in the UK. Framed as “Phase 1” of the UK’s approach to cryptoasset regulation, HMT’s paper was quickly followed by discussion papers from the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and Bank of England (BOE) on the future regulatory approach to such stablecoins.
Although there are a number of steps to go before the stablecoin regime comes into effect (with implementation anticipated in 2025), the 2023 papers give helpful insights into the direction of the new regime.