The UK's Financial Conduct Authority (FCA) has reduced its proposed capital requirement for stablecoin issuers from 2% to 1% of the total stablecoins in circulation, as outlined in a new framework document published Tuesday. The FCA stated that the change makes the prudential framework more proportionate for larger issuers while maintaining overall robustness. This requirement is lower than the 2% equivalent under the EU's MiCA regulation. The FCA also aims to simplify the crypto exchange framework, requiring exchanges to set aside 40% of trading capital to cover potential losses and apply a 40% potential loss to collateral value when lending or trading. The loosening follows the Bank of England's reversal of its proposal to cap individual stablecoin holdings at £20,000. Major financial markets globally are establishing formal crypto oversight regimes, with stablecoins a key focus.

Key facts

• FCA reduces stablecoin capital requirement from 2% to 1% of circulating value.
• New requirement is lower than EU MiCA's 2% equivalent.
• FCA simplifies crypto exchange framework with 40% trading capital set-aside.
• Follows Bank of England's reversal of £20,000 stablecoin cap proposal.
• Part of global trend in establishing formal crypto asset regulations.