FCA PS26/10: UK Stablecoin Issuance

On 30 June 2026, the FCA published PS26/10 as part of its Cryptoasset Roadmap, setting out the final rules for stablecoin issuance in the UK following its earlier consultation, CP25/14.

This article summarises the final framework for non-systemic stablecoin issuers, covering: backing assets; segregation and the statutory trust; safeguarding arrangements; record-keeping and reconciliations; redemption; use of third parties; and disclosure requirements.

Backing assets

Eligible Backing Assets

Qualifying stablecoins must be fully backed at all times, using the same range of permissible assets as consulted on.

• Core backing assets are short-term deposits and short-term government debt instruments that form the baseline eligible backing asset class for all UK stablecoin issuers.
• Expanded backing assets are available to issuers that have notified the FCA of their intention to use them and demonstrated the requisite skills and competence. These include:
  • longer-term government debt instruments maturing in more than one year;
  • units in a Public Debt Constant NAV Money Market Fund (“PDCNAV MMF”); and
  • assets, rights, or money held as counterparty to a repurchase agreement or a reverse repurchase agreement, subject to certain conditions.

Composition requirements

Three quantitative requirements apply to the composition of the backing asset pool:

• On-Demand Deposit Requirement (ODDR): As consulted on, the FCA obliges all UK stablecoin issuers to hold a minimum of 5% of their backing assets in on-demand bank deposits at all times.
• Core Backing Asset Requirement (CBAR): Firms must hold, at all times, core backing assets equal to the higher of: (i) 5% of the backing asset pool; or (ii) the highest daily redemption percentage in the past 180 redemption days (or, if shorter, since CASS 16 first applied).
• Backing Asset Composition Requirement (BACR): Renamed from the "backing asset composition ratio", the BACR applies only to issuers using expanded backing assets and requires them to maintain a minimum proportion of core backing assets within the total pool for each individual token issuance.

In the final rules, the FCA has simplified the BACR by removing the peak estimated daily redemption amount component and increasing recalculation frequency to every redemption day.

Segregation and statutory trust

The backing asset pool must be held on statutory trust for tokenholders. This gives rise to fiduciary duties and ring-fences the pool assets from the firm's own estate, placing them outside the insolvency estate.

Where an issuer operates multiple stablecoin products, a separate backing asset pool under a separate trust must be maintained for each, preventing co-mingling and containing contagion risk.

Issuers must fully back all UK-issued qualifying stablecoins from the point of minting, including stablecoins they hold themselves.

Safeguarding of backing assets

Backing assets must be held by third-party custodians and may not be held solely by the issuer.

Intragroup custodians

The FCA has amended its original proposal to permit intragroup custodians, allowing up to 20% of the backing pool to be held by an intragroup custodian (consistent with the CASS 7 approach to client money diversification), with at least 80% held with unconnected third parties.

Firms may exceed the 20% limit where strict compliance would be disproportionate, having regard to pool value, business nature and scale, and available custodian safety, but must notify the FCA before relying on the exemption and review it periodically.

Issuers must obtain a signed acknowledgement letter from each custodian confirming assets are held on trust for tokenholders. Electronic letters are permitted; letters must be reviewed at least annually.

Record-keeping and reconciliations

The FCA is proceeding with the majority of its record-keeping and reconciliations proposals. Issuers must perform daily internal and external reconciliations verifying that the backing asset pool value matches stablecoins in circulation and must maintain accurate records of assets held, their valuations, locations, and each reconciliation performed. The unallocated backing funds account requirement has been removed; funds must be placed directly into backing funds accounts or relevant assets accounts, with any excess removed at the next reconciliation.

The FCA has removed the unallocated backing funds account requirement. Firms must now place funds directly into backing funds accounts or relevant assets accounts, removing any excess at the next reconciliation.

Any shortfall must be resolved by the end of the business day on which it is identified; if not possible, the FCA must be notified without delay. Issuers may retain a surplus of up to 5% of the stablecoin pool value; anything above that must be withdrawn on the same day. The FCA considers this additional flexibility appropriate given the backing pool's role in maintaining the stablecoin's peg.

Redemption

Redemption Timeline (T+1)

The T+1 redemption clock now starts when the issuer receives the stablecoin in its wallet rather than when a request is made, meaning AML/KYC checks occur before the clock begins and do not erode the T+1 window.

The FCA is maintaining the universal right to redeem any amount of UK-issued qualifying stablecoin within T+1, subject only to any requirement under money laundering legislation.

Redemption rights and contracts

Issuers must have a contract with every person to whom they issue stablecoins, setting out redemption conditions. The right to redeem must transfer in law from holder to holder, so secondary market buyers may enforce it on the same terms as the original holder. The FCA is not prescribing a particular legal mechanism, provided the right is genuinely universal and enforceable for all tokenholders.

Use of third parties

The FCA is proceeding with its third-party proposals without material amendment. Issuers may delegate elements of the issuance activity (including selling stablecoins, processing redemptions, or managing the backing pool) but remain fully responsible for regulatory compliance. A UK-law-governed contract with each third party is required, with clear roles and responsibilities, adequate due diligence, and ongoing governance oversight.

Disclosure requirements

• Timing of Disclosures: The value and composition of the backing asset pool (by asset type, not individual positions) and total stablecoins in circulation must be disclosed at least quarterly. All other information must be updated whenever it becomes inaccurate.
• Detail of Disclosures: Backing asset information must be disclosed by asset type only; individual positions within each type need not be broken down. Firms may choose their own format, provided required information is presented clearly and accessibly.
• Annual Independent Review: An annual independent review of the accuracy of the issuer's 1:1 ratio statements is required; the outcome must be published promptly.
• Website Disclosures and QCDDs: Website disclosures must include everything in the Qualifying Cryptoasset Disclosure Document (QCDD) plus any additionally required information. Only firms holding more than 20% of the backing pool need to be identified in disclosures. Each QCDD must carry a clear publication date and be accessible via a central repository; previous versions must be provided to tokenholders on request. Post-issuance monitoring findings need not be made public.
• Keeping Disclosures aligned: Website disclosures and QCDDs must be updated at the same frequency and kept consistent. Where exact simultaneous updates are not operationally practicable, firms must align them as far as reasonably practicable; the issuer is responsible for both.
• Withdrawal Rights: Withdrawal rights apply only where a person has agreed to buy or subscribe to a stablecoin contingent on its future admission to trading and the relevant disclosure document is subsequently updated before admission. Once a stablecoin has been issued, transferred, or used, withdrawal rights cease; the offering entity must notify prospective holders whenever a disclosure document is updated.
• Identifiers: Issuers must include the stablecoin's name and relevant digital identifiers (for example, DTI codes under ISO 24165) in both website disclosures and the QCDD.

Next steps

The PS26/10 rules apply to all firms operating or intending to operate as stablecoin issuers. Firms should now: review backing asset arrangements; establish the statutory trust structure; evaluate custody and intragroup arrangements; prepare for record-keeping, reconciliation and redemption requirements; and prepare website disclosures and QCDDs with the required digital identifiers.

Please contact us to discuss how these requirements apply to your business.