The UK House of Lords has passed an amendment to the Financial Services and Markets Bill, mandating that HM Treasury develop a comprehensive strategy for the digital asset sector. This initiative covers crypto assets, stablecoins, tokenized securities, and digital financial infrastructure, aiming to replace the current fragmented regulatory approach.
The legislative push follows a June 2026 report by the Financial Services Regulation Committee, which criticized previous requirements for stablecoin issuers. Specifically, the committee challenged a proposed 40% unremunerated central bank deposit mandate, arguing it would render local stablecoin issuance economically unviable.
On September 10, 2026, the Bank of England updated its policy for systemic stablecoins. The new structure requires 70% of reserves to be held in short-term UK government debt and 30% in unremunerated central bank deposits. Additionally, the regulator introduced a temporary issuance cap of £40 billion per stablecoin.
The Financial Conduct Authority is scheduled to oversee a new regulatory framework for crypto activities, which is expected to take effect in 2027. Lawmakers emphasized that these measures are necessary to maintain the UK's competitiveness against evolving regulatory standards in the US and the EU, including the EU's MiCA regulation.
