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Sterling stablecoins and tokenized deposits are set to enter the UK’s mainstream payments perimeter. Treasury confirmed the intent on April 21, 2026, at London Fintech Week, outlining a plan to replace fragmented payments rules with a single, coherent framework. It covers traditional payment services, blockchain-based payments, and, eventually, AI-initiated transactions.
The payments overhaul also links directly into the UK’s broader cryptoassets regime, set to take effect in October 2027. City Minister Lucy Rigby said the initiative aims to keep the UK at the forefront of global payments innovation, with a detailed consultation expected soon.
The UK Treasury announced yesterday that stablecoins, tokenized deposits, and traditional payment services will sit under a single regulatory framework, unveiled at London Fintech Week.
When a G7 government stops treating stablecoins as a crypto-adjacent concern and starts…
— OpenEden (@OpenEden_X) April 22, 2026
The reform aligns payment services and e-money regulation with the UK’s FSMA-based framework, creating a single ruleset covering both traditional and tokenized payments. Payment stablecoins would operate under a new FSMA-linked issuance regime, with systemic pound-denominated stablecoins jointly overseen by the Bank of England and FCA. Tokenized deposits, essentially commercial bank money on blockchain rails, serve as a complementary pillar, keeping credit creation within the banking system as settlement moves on-chain.
Planned legislation also aims to lower entry barriers for stablecoin payment service firms. The FCA will gain expanded Open Banking powers, while the Payments Systems Regulator will be absorbed into it. The UK government will also explore how rules should evolve as AI agents begin autonomously conducting payments on users’ behalf.
Related: Coinbase Lists tGBP Stablecoin, Bringing British Pound Onchain
Chris Woolard CBE, EY partner and former FCA interim CEO, has been appointed Wholesale Digital Markets Champion to advance the UK’s tokenized wholesale financial markets through public-private coordination. The Treasury committed £1 million in additional CFIT funding from April 2026.
Delighted to have announced the appointment of Chris Woolard CBE as the Wholesale Digital Markets Champion today!
As Champion, Chris will help provide leadership & coordination to help us drive forward the digitalisation of our markets – an incredibly important agenda. pic.twitter.com/a74gX2CT2o
— Lucy Rigby KC MP (@LucyRigby) April 21, 2026
Meanwhile, the Bank of England is expanding its Digital Securities Sandbox to include regulated stablecoins as wholesale settlement assets.
However, some industry voices highlight structural challenges. Anthony Yeung, chief commercial officer of CoinCover, reportedly noted that while the government’s stablecoin and tokenization focus points in the right direction, real-world adoption will depend heavily on custody frameworks, key management, and disaster recovery infra — not just regulatory clarity.
A key consumer protection gap remains. Sterling stablecoins are not covered by the UK’s Payment Services Regulations, leaving users without standard fraud safeguards or dispute-resolution mechanisms available for traditional payments. The FCA’s March 2026 Perimeter Report confirmed that payments legislation needs to be modernized for tokenized instruments. Full integration depends on the broader cryptoassets regime, set to commence on October 25, 2027, with a licensing gateway opening in September 2026.
In the meantime, FCA’s stablecoin Regulatory Sandbox is already generating live data to feed that process. Revolut, Monee Financial Technologies, ReStabilise, and VVTX were selected from 20 applicants and have been testing stablecoin issuance across use cases spanning payments, wholesale settlement, and crypto trading in a live environment since Q1 2026. Findings are expected to directly shape the UK’s final stablecoin rules later in 2026.
🇬🇧UK REGULATOR PICKS 4 FIRMS FOR STABLECOIN SANDBOX
The FCA has selected Revolut among others to test stablecoins in real-world conditions with safeguards.
The regulator will assess how UK issuers handle payments, settlement and trading as it shapes final stablecoin rules. pic.twitter.com/dUcXq8yd3u
— Coin Bureau (@coinbureau) February 25, 2026
On the tax transparency front, CARF obligations are already operative. UK cryptoasset service providers, including stablecoin issuers and platforms, must collect user and transaction data annually, effective January 1, 2026. First reports are due to HMRC by May 31, 2027, covering the full 2026 calendar year.
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