UK Moves to Loosen Stablecoin Rules, Diverging From the EU

Britain's Financial Conduct Authority proposed lighter capital requirements for issuers of stablecoins, the digital tokens designed to hold a fixed value against a currency, CoinDesk reported. The proposal would set lower buffers than the European Union's framework known as the Markets in Crypto-Assets regulation, and it follows the Bank of England's decision to step back from a planned cap on how large a stablecoin holding an individual could keep.

The move positions London to compete with Brussels for digital-asset business by offering a lighter regulatory approach. Supporters argue that proportionate rules will attract issuers and innovation, while critics warn that thinner capital buffers leave less protection if an issuer cannot meet redemptions during periods of stress.

The regulatory competition runs alongside continued enforcement against fraud. CoinDesk separately reported that the US Securities and Exchange Commission won a $5.5 million default judgment against operators of an alleged fake crypto platform that built trust through messaging apps before misappropriating user funds. Together the developments show regulators moving in two directions at once, easing rules to attract legitimate business while pursuing outright fraud.