Britain's financial watchdog published its final crypto rulebook on Tuesday, and the headline change was cutting the minimum capital buffer for stablecoin issuers in half — from 2% to 1% of the value of tokens in circulation. It's the first comprehensive set of crypto rules the FCA has finalised, bringing a much larger slice of the UK digital asset market under formal oversight.
The reduction came after sustained industry pushback. When the FCA proposed the 2% threshold last year, firms argued it would push out newer entrants that hadn't yet built up sufficient capital reserves. David Geale, the FCA's head of payments and digital finance, ultimately conceded that the original demands were likely too high for the current market. The final rules also relax redemption timelines and ease public disclosure requirements.
Against the EU's benchmark, the UK now looks considerably lighter. MiCA sets a 2% buffer for standard stablecoin issuers and bumps it to 3% for those deemed significant — and on top of that, it requires issuers to be authorised as a bank or e-money institution. Those terms were demanding enough that Tether chose to sit out MiCA entirely. The Bank of England, which oversees systemic stablecoins separately, also walked back its own tougher initial proposals.
There's a strategic calculation behind all this. Since Brexit, London has been making a deliberate play for continental fintech business. MiCA is now fully live, and crypto founders from Germany, the Netherlands, and France are relocating to Dubai in growing numbers — where licensing is faster and cheaper. The UK is pitching itself as the more sensible European alternative.
One caveat that's easy to miss: the rules only cover stablecoins pegged to the British pound, a tiny slice of a global market where dollar-denominated USDT and USDC dominate. The rulebook doesn't kick in until October 2027, giving issuers well over a year to adapt. Where Brussels insists on strictness, London is betting on flexibility.
