The UK government has unveiled the latest version of its plan to regulate fiat-backed stablecoins, revealing changes to the Financial Conduct Authority (FCA) and the Bank of England.。

Stablecoin Legislation Coming Soon

According to the 21-page document, the UK government aims to introduce the legislation by early 2024.。British lawmakers passed the Financial Services and Markets Act 2023 in June, making it clear that cryptocurrencies will be regulated as regulated financial instruments.。

With the proposed rules, the FCA will oversee certain activities related to fiat-backed stablecoins。

"The UK Treasury will bring activities related to fiat-backed stablecoins under FCA regulation through secondary legislation.。Exact legal drafting is yet to be worked out and draft secondary legislation will be published before it is subsequently submitted to Parliament。

Role of FCA

In the rules, the FCA will specify backing asset requirements for issued fiat-backed stablecoins, as well as redemption rights, capital requirements, etc.。Regulations will mandate the holding of fiat-backed stablecoins in statutory trusts.。However, the FCA will seek public comment before the rules take effect.。

The Treasury also intends to oversee hybrid stablecoin payments and pure stablecoin payments.。

The document added: "This will cover payments including those relating to the purchase of services or goods in stores or in online retail payments.。"As with fiat currency peer-to-peer transfers, it does not include peer-to-peer stablecoin transfers that are not offered commercially by payment services that support or facilitate transfers; nor does it include the purchase of stablecoins using fiat currency, as this was regulated by the PSR in 2017.。"

Meanwhile, the Bank of England will regulate DSA service providers aimed at capturing stablecoin-based arrangements.。

"To the extent that a fiat-backed stablecoin company authorized by the FCA is identified by the UK Treasury as a systemic company and therefore should be regulated by the Bank of England, the Government wants the Bank of England to be able to regulate as the main prudential regulator, while the company continues to be subject to the FCA's conduct supervision.。"The UK Treasury says。