UK stablecoin regulation begins to take shape in multiple FCA, BOE documents
A suite of documents was published in the United Kingdom on Nov. 6 that concern stablecoin regulation. The Financial Conduct Authority (FCA) released a discussion paper, as did the Bank of England (BOE). To accompany those, the BOE’s Prudential Regulatory Authority (PRA) released a letter to CEOs of deposit-taking institutions, and the BOE released a “cross-authority roadmap” to link them together.
His Majesty’s Treasury set the stage for the flurry of releases on Oct. 30 with a short document previewing plans for regulation. The FCA paper explored the same ground in much greater detail.
Stablecoin regulation is the first step to broader crypto asset regulation, the FCA said. The discussion paper outlined potential retail and wholesale stablecoin use cases. Its discussion included auditing and reporting, the backing of coins owned by the issuer and the independence of the backing assets’ custodian.
The paper concentrated on ways in which the principle of “same risk, same regulator outcome” could be applied. It proposed using the existing client assets regime as the basis of rules on redemption and custodianship and the senior management arrangements, systems and controls sourcebook to organize business affairs. There are existing operational resilience and financial crime frameworks, as well as numerous others.
The UK FCA is proposing that stablecoin holders have the right of direct redemption. Which makes issuers a lot more like banks and will raise a bunch of AML/KYC issues for issuers pic.twitter.com/lZLQXlmemu
The FCA is considering adapting existing prudential requirements for regulated stablecoin issuers and custodians from the existing regime and making them applicable to other crypto assets eventually.
The BOE paper
Read more on cointelegraph.com
