UK To Regulate Stablecoins as a Form of Payment Via New Bill

The UK’s bill, introduced to parliament on Wednesday, follows the EU’s approach to regulating stablecoins while repealing union-era law

article-image

Houses of Parliament in London | Source: Shutterstock

share

key takeaways

  • The bill seeks to regulate stablecoins as a form of payment, bringing the nascent tech in line with the country’s existing rules centered on financial services
  • Financial Markets Infrastructure Sandboxes will also be established to allow firms to test new technologies and practices in isolated environments

The UK’s Treasury said Wednesday it will seek to regulate “certain types” of stablecoins as a form of payment in a wide-ranging financial bill designed to phase out hundreds of pieces of EU-retained law.

The Financial Services and Markets Bill, introduced to the lower house in parliament, will also provide the government with new powers to direct regulators to review their financial rules under conditions of what is deemed as public interest.

It comes as the EU — which separated from UK when Brexit finally took effect in early 2020 — moved similarly on stablecoin regulation via the Markets in Crypto Assets (MiCA) bill, late last month.

Specifically, MiCA will subject large stablecoin issuers to strict operational and prudential rules with further limits dependent on their wide use as well as applying a cap to those issuers of 200 million euros ($203.3 million) in daily transactions.

Both MiCA and the UK’s latest bill are seeking to tackle the view held by regulators worldwide of a perceived threat to financial stability posed by stablecoins following the fallout of Terra’s collapse in May.

Financial Markets Infrastructure Sandboxes, included in the UK’s Financial Services bill, will also be created in a bid to allow firms to test new technologies and practices.

The sandboxes, typically an isolated testing environment before go to market products are released to the general public, would allow for increased efficiency, transparency and resiliance of new fintech products including crypto, UK’s Treasury said in a statement.

“Today is a landmark day for financial services in the UK,” Nadhim Zahawi, chancellor of the exchequer, said in the statement.

To maintain the UK’s position as an international and competitive financial center, the bill will reform EU-derived legislation governing the UK’s capital markets, ensuring the country’s rulebook remains fair and outcomes-based. It must also maintain high regulatory standards, the chancellor said.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Ethena Labs is leaping from its flagship synthetic dollar, USDe, to a full product suite—USDtb, iUSDe, and the Arbitrum-based Converge Chain—designed to marry crypto-native yields with TradFi-grade compliance. Our analysis shows how expanding into CME, ETF options, and tokenized Treasuries could lift protocol revenue from sub-$500 million in a bear case to several billion dollars if favorable regulation and institutional adoption align.

article-image

Bitcoin is still rising, 11 years after the documentary film The Rise and Rise of Bitcoin

article-image

Arch Labs CEO told Blockworks that the team plans to launch a native token, but declined to give details

article-image

CEO Mike Silagadze tells Blockworks that the US is “open for business” and why its DeFi bank offering is the first of many

article-image

Doing one thing well and leaving everything else out is often what disruptive technologies do best

article-image

Why an analyst is kicking off COIN coverage with “buy” rating