UK FCA establishes regulatory sandbox for stablecoins…allows testing of pound- and dollar-pegged tokens

The UK's Financial Conduct Authority (FCA) is moving quickly to organize digital asset policy by introducing a dedicated regulatory sandbox for the stablecoin industry. The aim is to support firms that issue tokens linked to the pound sterling or the US dollar so they can test products and services under conditions close to real-world environments.

On the 26th (local time), virtual asset (cryptocurrency) specialist media DL News reported that the FCA has added a special cohort for stablecoin firms within its existing sandbox program. Through this, issuers will be able to test various functions such as payments, custody and transfers in a regulated environment as they prepare for commercialization.

The FCA said a number of major stablecoin firms have already confirmed participation in the cohort and that "preparations for pound-based stablecoin tests will be completed within several months." It added that, combined with the UK government's efforts to build a stablecoin payments framework, this is expected to have a positive effect on industry activation.

Applications for sandbox support can be submitted until January 18, 2026, and the FCA said the measure will serve to increase regulatory clarity around stablecoins in the UK and strengthen firms' experimental environments.