UK’s FCA Seeks Additional Input on Stablecoin Regulations to Mitigate Risks
The Financial Conduct Authority (FCA) is expanding its consultation on stablecoin oversight, aiming to balance innovation with consumer protection. Regulatory focus intensifies following the 2022 TerraUSD collapse, which erased billions in investor wealth.
New proposals emphasize value stability mechanisms and custody safeguards for digital assets. The FCA will collaborate with the Bank of England on systemic stablecoin frameworks, with a joint consultation expected later this year.
This builds on 2023 policy papers that established Britain’s foundational approach to crypto asset regulation. The move signals growing institutional recognition of stablecoins’ role in modern finance, while addressing vulnerabilities exposed by past market failures.
