The FCA has published a policy statement with final rules for non-systemic UK-issued qualifying stablecoins. The final rules cover issuance, backing assets, redemption, safeguarding and disclosures. Reflecting stakeholder feedback to its previous related consultations – notably CP25/14 (May 2025) - and lessons learned from the Stablecoins Sandbox Cohort, the FCA has largely maintained the framework that it proposed in CP25/14. However, it has made some amendments aimed at improving ‘clarity, operability and proportionality’. This article highlights some of those changes. The final rules need to be considered alongside both the Bank of England (BoE)/FCA approach document on joint regulation of systemic stablecoin issuers and the BoE’s policy statement/draft rules (Code of Practice) on the systemic stablecoin regime, which have also recently been published.

• The range of permissible backing assets remains the same as consulted on.
• The backing asset composition requirement (previously ‘ratio’ - BACR), which will be required if issuers hold expanded backing assets in the backing pool, has been simplified by removing the need to estimate redemption forecasts.
• However, to mitigate risk from issuers no longer estimating their near future redemption needs, they will now be required to calculate the BACR on every redemption day (rather than every 14 redemption days, as original proposed).
• For now the FCA has rejected respondents’ suggestions for more dynamic or issuer-specific calibration into the backing asset pool, and points out that issuers can apply dynamic risk management approaches to assets outside of the BACR if they choose to.
• It has also rejected the idea of allowing backing assets to be held in multiple currencies. Potential additional benefits of such a move (eg greater international competition) are outweighed by the consequent FX risk and its potential to compromise trust in UK-issued qualifying stablecoins as a money-like instrument.
• The FCA is maintaining its original proposal of prohibiting issuers from paying interest or income from the backing asset pool to tokenholders, but will explore the competition and economic implications of offering interest further (although it expressly states this doesn’t imply that its position will change).

• The FCA has proceeded with its proposal that the backing asset pool must be held on statutory trust for the benefit of tokenholders. It is of the view that alternative structures such as contractual segregation or the use of SPVs would not provide adequate protection in all cases.
• The proposed requirement to have separate trusts for each UK-issued qualifying stablecoin product has also been maintained as it reduces the contagion risk between products in the event of firm failure.
• In addition, the FCA is keeping its requirement that issuers must fully back all UK-issued qualifying stablecoins – including those they own themselves - from the point at which they are minted. It points out that firms can avoid the need to back tokens that aren’t intended to be circulated by burning them.
• The requirements relating to who can act as a custodian have been amended to reflect stakeholder concerns about the feasibility of accessing custodians able or willing to operate trust-based arrangements. Limited use of intragroup custodians – rather than just unconnected third party custodians - will now be permitted, subject to certain safeguards against conflicts of interest or contagion along the lines of the approach already taken in CASS 7.
• The FCA will consult separately on rules relating to the terms on which a firm holds money and assets within the statutory trust in the event of firm failure or another pooling event.

• While most of the proposals on record-keeping and reconciliations are going ahead as consulted on, the FCA has made some changes including:
  • Removal of the requirement – and related restrictions - for issuers to temporarily hold payments received for UK-issued qualifying stablecoins in segregated ‘unallocated backing funds’ accounts pending completion of daily reconciliations and allocation either to backing assets or the firm’s own funds. Instead, with a view to simplifying the process and providing greater certainty over the status of those funds, firms must place them into backing funds accounts or invest them in relevant assets accounts, then remove any excess at the next reconciliation.
  • Amendment of the requirement for UK stablecoin issuers to withdraw any excess from the backing asset pool on the same business day that it is identified. Firms will now be allowed to retain a limited excess of up to 5% of the value of the relevant stablecoin pool (as determined by an internal reconciliation). As this excess will be held within the backing asset pool, it will be subject to the statutory trust. The objective is to reduce the frequency with which firms will need to transfer assets out of the pool.
• The FCA notes that, as well as its finalised CASS 16 rules for record-keeping and reconciliations, its final rules for regulatory reporting of backing assets are set out in Chapter 12 of its policy statement PS26/13 (Application of FCA Handbook for Regulated Cryptoasset Activities). PS26/13 also contains feedback on the proposed scope of the Consumer Duty and final guidance on its application to UK stablecoin issuers.

• Redemption timelines have been adjusted so that AML/KYC checks are completed before the redemption period begins.
• The FCA emphasises that it expects firms to fully comply with AML requirements and the Consumer Duty and other regulations that ensure good customer outcomes. For example, any redemption fees charged to tokenholders who are retail customers of the issuer should be assessed to ensure they align with the Duty’s price and value outcome.
• The FCA has amended the proposed requirement for UK stablecoin issuers to have a contract in place with a holder of a qualifying stablecoin which clearly states the conditions of redemption. While there will still be a requirement for a contract which incorporates the conditions of redemption, it is not mandating which legal mechanisms issuers should use to transfer the issuer’s obligations to redeem between holders. Issuers will be able to use any effective legal mechanism that suits their business model.

• Following feedback to CP25/14 and lessons from the Stablecoins Sandbox Cohort, the FCA has included clarifications in the policy statement on its proposals relating to scope, frequency, updating, and the requirement for an annual independent review of disclosures.
• In CP25/41 (Regulating cryptoassets: Admissions & disclosures and market abuse regime for cryptoassets – December 2025), the FCA proposed that a UK-issued qualifying stablecoin disclosure document (Stablecoin QCDD) should be made available to prospective tokenholders before sale or subscription, as well as being publicly available. It was also proposed that UK stablecoin issuers should set out the withdrawal rights to prospective tokenholders of UK-issued qualifying stablecoins. The information required in a Stablecoin QCDD would be the same as website disclosures required in CP25/14, and issuers should maintain and update Stablecoin QCDDs at the same frequency as website disclosures. In light of feedback to CP25/14, CP25/41 and the Stablecoins Sandbox Cohort, again the FCA is proceeding as proposed but with clarifications. For example:
  • There will be a requirement for firms to provide previous versions of the Stablecoin QCDD to holders, and relevant former holders, on request.
  • Obligations to make prospective holders aware of their limited withdrawal rights have been strengthened.

• FCA policy statement PS26/11 (Regulated Cryptoasset Activities) includes feedback on the proposed scope of regulating custody of cryptoassets and final guidance on its application to UK stablecoin issuers, and the final CASS 17 rules.

The FCA’s final rules for its non-systemic stablecoins regime should be considered alongside the BoE/FCA approach document on joint regulation of systemic stablecoin issuers (closing to comments on 30 September 2026) (see our separate article) and the BoE’s policy statement and draft rules on systemic stablecoins (open for consultation until 22 September 2026 - see our separate article).

As mentioned above, in relation to safeguarding the FCA plans to consult on rules relating to the terms on which a firm holds money and assets within the statutory trust in the event of firm failure or another pooling event.

The FCA has made it clear that it intends to keep the new rules for the non-systemic stablecoins regime under review as the market develops.

The FCA also notes that it is working with the government and other regulators to develop the regulatory approach for different stablecoin use cases, including:

• Payments, where stablecoin payments (and other tokenised payments such as tokenised deposits) will be part of the modernised payments regulatory regime outlined in the Payments Forward Plan; and
• Wholesale settlement, where the FCA - alongside the BoE – will allow certain stablecoins to be used for settlement within the Digital Securities Sandbox.

The go-live date for the UK’s new cryptoassets regime is 25 October 2027. The FCA’s gateway for applications will be open between 30 September 2026 and 28 February 2027.

If you would like to discuss the potential impact of the FCA’s final rules for its non-systemic stablecoins regime - or any other aspect of the proposed systemic or non-systemic stablecoin regulatory regimes - on your business, please get in touch with one of the people listed above or your usual Hogan Lovells Cadwalader contact.

Authored by Virginia Montgomery.