UK FCA Cuts Stablecoin Capital Requirement to 1%, Below EU MiCA

The UK Financial Conduct Authority cut the capital requirement for stablecoin issuers to 1% from 2%, setting a lighter standard than the European Union’s Markets in Crypto-Assets regulation, or MiCA.

CoinDesk reported on June 30 that the FCA disclosed the change in formal crypto-asset regulatory guidance published the same day. The watchdog said it would halve the capital reserve ratio applied to stablecoin issuers relative to the total amount of tokens issued.

The adjustment is meant to make prudential rules for large issuers more proportionate while preserving the overall strength of the framework, the FCA said.

The new standard is below the 2% level required under EU MiCA. The FCA added that it aims to simplify key parts of the regulatory framework to make the rules easier to apply in practice.

The move follows the Bank of England’s decision to drop plans to cap individual stablecoin holdings at 20,000 pounds. Both agencies have now shifted toward easing earlier regulatory proposals.

The FCA also revised its framework for crypto exchanges. Under the new rules, exchanges must set aside 40% of trading capital against potential losses. They must also apply a 40% loss assumption to the value of collateral used in lending and trading with other institutions.