“Regulatory Framework for Stablecoins in the UK: Ensuring Stability and Trust”

1. It will be the job of the Bank of England, the Financial Conduct Authority (FCA), and the Payment Systems Regulator (PSR) to make sure that fiat-backed stablecoins are regulated in a way that protects customers and keeps the economy stable.

2. The FCA wants to control the use of stablecoins backed by fiat currency in payment chains. They also want to control the actions of issuing and holding these stablecoins, no matter what they are meant to be used for (e.g., payments, storage of value, settlement asset).

3. Legislation will describe the type of stablecoins that are backed by fiat currency. These coins must keep their value stable by mentioning a fiat currency and keeping that currency as “backing.”

4. There will be rules about how to use stablecoins backed by real currency in payment chains through approved or registered payment institutions (PIs) after changes are made to the Payment Services Regulations 2017 (PSRS 2017).

5. Under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (“RAO”), UK-issued fiat-backed stablecoins will be able to be issued and stored. The FCA will make rules for companies that do these things.

6. Firms that want to issue or hold fiat-backed stablecoins will need to follow FCA rules and guidelines, as is normal for activities that are controlled by the FCA.\

7. In the UK, you will be able to use fiat-backed stablecoins that were issued in or from the UK by approved RAO issuance activity companies.

8. To give people and businesses in the UK more trust in using stablecoins as a payment method, this set of rules is meant to make things clear.

              Co-responsibility for supervision of systemic fiat-backed stablecoin firms:

1. Systemic fiat-backed stablecoin companies are mainly regulated by the Bank of England, while the FCA is still in charge of their behavior.

2. There’s a chance that the PSR could also help regulate these companies, especially when it comes to issues of competition, creativity, and access.

3. A letter of understanding sets up how these bodies will work together on regulations.

4. There will be steps in place to make sure that firms have an easy time as they move from one type of control to another.

5. HM Treasury can help businesses get used to dual regulation by setting up temporary regulatory arrangements.

6. It’s needed that the Bank of England put out a broad policy statement on how it plans to regulate global Distributed Systems of Accounting (DSA) payment systems and service providers.