Policy
UK House of Lords Calls for Comprehensive Digital Asset Strategy
The UK’s House of Lords has taken a significant step by passing an amendment that requires HM Treasury to develop a formal strategy for digital assets, including crypto assets, stablecoins, and tokenized securities. This decision, attached to the Financial Services and Markets Bill, reflects concerns among peers that the UK is lagging behind the US and EU in the global crypto landscape.
The amendment aims to replace the current piecemeal regulatory approach with a cohesive strategy. It encompasses a wide range of digital financial infrastructure, addressing the need for a more structured regulatory framework.
A report from the Financial Services Regulation Committee in June 2026 laid the groundwork for this initiative, urging regulators to reconsider the stringent requirements imposed on stablecoins. The report specifically criticized the initial 40% unremunerated central bank deposit requirement, which was deemed detrimental to the viability of UK-based stablecoin issuance.
In response, the Bank of England revised its policy on systemic stablecoins in September 2026, introducing a new backing structure that requires 70% in short-term UK government debt and 30% in unremunerated deposits. This change aims to balance the need for regulatory oversight with the economic viability of stablecoin issuers.
Looking ahead, the Financial Conduct Authority (FCA) is set to implement a comprehensive framework for crypto asset activities by 2027, with legal groundwork expected to be laid in December 2025. The urgency behind these developments is driven by a desire to enhance the UK's competitiveness in the rapidly evolving global crypto market.
FAQ
What recent action did the UK House of Lords take regarding digital assets?
The UK House of Lords passed an amendment requiring HM Treasury to develop a formal strategy for digital assets, including crypto assets, stablecoins, and tokenized securities.
Why is the UK developing a comprehensive digital asset strategy?
The strategy aims to address concerns that the UK is lagging behind the US and EU in the global crypto landscape and to replace the current piecemeal regulatory approach with a cohesive framework.
What changes were made to the regulation of stablecoins in the UK?
The Bank of England revised its policy on systemic stablecoins, introducing a new backing structure that requires 70% in short-term UK government debt and 30% in unremunerated deposits.
When is the Financial Conduct Authority (FCA) expected to implement a comprehensive framework for crypto asset activities?
The FCA is set to implement a comprehensive framework for crypto asset activities by 2027, with legal groundwork expected to be laid in December 2025.
What was the initial requirement for stablecoins that was criticized in the June 2026 report?
The initial requirement criticized was a 40% unremunerated central bank deposit, which was deemed detrimental to the viability of UK-based stablecoin issuance.