UK Lords Open Inquiry as Bank of England and FCA Tighten Rules Around Stablecoins
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Coinbase Urges Removal of Bank of England Stablecoin Caps
In testimony to a UK parliamentary committee, Coinbase argued that the Bank of England’s proposed individual and commercial holding caps would prevent sterling‑denominated stablecoins from scaling into wholesale settlement infrastructure and urged removal of the limits, broader reserve eligibility and explicit liquidity backstops. The case sits against a BoE draft that favors a large minimum share of reserves held in central bank deposits (reported at around 40%), and a House of Lords inquiry with a March 11, 2026 submission deadline will weigh trade‑offs between containment and market enablement.
Japan’s FSA Proposes Tight Rules for Stablecoin Reserves Ahead of 2025 Payments Reform
Japan’s Financial Services Agency opened a consultation on draft rules that would restrict which foreign bonds can back regulated stablecoins and add new oversight for intermediaries. The proposals set high credit and issuance-size thresholds, mandate clearer customer disclosures from bank subsidiaries, and require assurances about foreign issuers’ activity in Japan, with the consultation closing Feb. 27, 2026.
JPMorgan Presses for Bank-Style Rules on Yielding Stablecoins
JPMorgan urges regulators to treat yield-bearing stablecoins like bank deposits, arguing reward payments that mirror interest should trigger bank-style oversight and capital rules. The move raises the odds of crypto-bank partnerships, a surge in charter or custody activity, and an accelerated regulatory showdown over reserve rules and market structure.
Revolut and three firms join FCA stablecoin sandbox
The FCA selected four firms — Revolut, Monee Financial Technologies, ReStabilise and VVTX — from 20 applicants to pilot fiat‑pegged tokens in a supervised sandbox. The move sits alongside Bank of England and Treasury tokenisation experiments and a House of Lords inquiry, meaning sandbox results will feed a multi‑year rulemaking and debate over reserve, custody and settlement arrangements.
Regulatory Fault Lines Are Reordering Stablecoins — GENIUS Act and MiCA Point Toward a Two-Tier Future
New U.S. and EU rules are redefining what it means for a stablecoin to function as cash by hardening redemption rights and access to reserves under stress. The result will be a bifurcated market where legally protected, highly liquid tokens behave like money in crises while other issuers trade like credit instruments when redemption pressure rises.
Kenya Treasury Proposes VASP Rules Tightening Stablecoin Backing
Kenya’s National Treasury opened a consultation on draft VASP rules that force local reserve holding and add transaction levies, directly targeting stablecoin plumbing and platform fees. The proposals sit within a broader global tightening trend—while Kenya emphasizes domestic reserve localization and mandatory bank accounts, other jurisdictions (e.g., Japan) are tightening collateral quality and cross‑border controls without full localization, a divergence that could create enforcement and market‑structure frictions.
Standard Chartered Flags Stablecoins as a Growing Threat to Bank Deposit Bases
Standard Chartered’s analysis warns that expanding dollar-pegged stablecoins could erode material shares of bank deposit bases and compress net interest-margin income, particularly for regional U.S. banks. The paper also highlights how central-bank policy choices — as signalled recently by South Korea’s authorities — and where issuers park reserves will determine whether stablecoins produce domestic deposit outflows or mainly cross-border capital-flow effects.
South Korea Moves to Cap Crypto Exchange Ownership and Tighten Stablecoin Rules
The Financial Services Commission is backing a proposal to limit major shareholders’ stakes in licensed crypto exchanges to roughly 15–20% and to shift exchanges into an authorization regime with tougher governance checks. Lawmakers are also moving toward a 5 billion won minimum capital floor for stablecoin issuers, while parallel pressures—from the central bank’s caution on won‑pegged coins to new Google Play app‑store registration rules and ongoing high‑profile stake sales at exchanges—are accelerating market consolidation and compliance costs.