UK FCA Prioritizes Pound Stablecoin Payments on 2026 Agenda
The United Kingdom’s Financial Conduct Authority (FCA) has designated pound‑pegged stablecoin payments as a priority for 2026, moving to accelerate a dedicated regulatory sandbox for prospective issuers ahead of forthcoming digital asset rules.
The FCA said the initiative forms part of “ambitious new growth measures” planned for next year, intended to support UK‑issued stablecoins to make payments faster and more convenient. In a letter to Prime Minister Sir Keir Starmer this week, the regulator outlined almost 50 reforms to reinforce the UK’s role as a global financial center, highlighting the advancement of pound‑denominated stablecoins in 2026 as a key milestone in its broader growth plan.
Trialing stablecoin payments ahead of new regulation
Firms intending to issue a pound stablecoin in the UK and seeking to test their products should apply to the regulatory sandbox by Jan. 18, 2026. The sandbox will enable pilots of stablecoin payment solutions in a controlled setting before the full regulatory framework comes into force.
The sandbox will operate within the FCA’s existing digital sandbox, offering participants regulatory guidance as they assess compliance, resilience, and consumer‑protection controls for sterling‑backed digital assets.
The announcement follows the FCA’s call for industry input on UK investment reforms. Earlier this week, the regulator invited firms active in digital assets to comment on draft guidance papers that are expected to inform the 2026 rulebook.
Broader competitiveness push
Elsewhere in the UK’s wider financial ecosystem, the Bailiwick of Guernsey’s Financial Services Commission (GFSC) launched a consultation on Dec. 11 under its Digital Finance Initiative, seeking feedback on tokenization, blockchain infrastructure, and stablecoin oversight.
The Digital Finance Initiative proposes a new stablecoin regulatory regime requiring 100% backing with high‑quality liquid assets, along with capital, reporting, and redemption standards.
Chris Hutley‑Hurst, head at Walkers Channel Island Regulatory & Risk Advisory Group, said the consultation represents a pivotal step for Guernsey’s digital finance sector, adding that clear frameworks for stablecoins, tokenization, and custody aim to balance innovation with robust supervision and support the jurisdiction’s ambitions in digital assets.
Policymakers in the UK and the Channel Islands are seeking to maintain regional appeal for innovative financial firms as other jurisdictions, including the European Union, progress their own stablecoin regimes.
“Our reforms help the UK maintain its global competitive edge in our world‑leading wholesale markets, attract international investment, and lead on innovation in financial services,” Nikhil Rathi, chief executive of the FCA, said in a statement.
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