The UK's stablecoin rulebook is moving toward a lighter capital cushion than first proposed. CoinDesk reported that the Financial Conduct Authority has reduced the proposed financial backing requirement for stablecoin issuers to 1% of the value of issued tokens, down from an earlier 2% proposal.

The change matters because capital requirements are one of the levers that determine whether a regulated stablecoin market is practical for new issuers or mostly viable for large incumbents. A lower permanent buffer could make the UK regime cheaper to enter, while still leaving firms subject to authorization, custody, redemption, and risk-management rules.

The move sits alongside a broader UK effort to bring crypto firms into a comprehensive regulatory perimeter. The Guardian reported that firms operating in the UK will have to hold capital against risky assets and conduct annual stress tests, with requirements expected to take effect in October 2027.

Stablecoins remain split across regulators. The FCA is developing rules for qualifying stablecoin issuers and crypto custody, while the Bank of England is setting policy and draft rules for systemic sterling-denominated stablecoin issuers. The Bank published its latest systemic stablecoin policy statement and draft Code of Practice last week.

The conservative read is that the UK is trying to avoid copying the EU's MiCA framework exactly. Lower buffers may help competitiveness, but the real test will be whether final rules can preserve reliable redemption and reserve management during market stress.