On 3 June 2026, the House of Lords Financial Services Regulation Committee, chaired by Baroness Noakes DBE, published the report 'Stablecoins: waiting for regulation.' The report concludes an inquiry launched in January 2026 into the growth and proposed regulation of stablecoins in the UK. The inquiry focused on the Bank of England's proposed regime for systemic stablecoins and the Financial Conduct Authority's proposed rules for fiat-backed stablecoin issuers and custodians.
The Committee's analysis addresses the proposed regulatory approach under the Financial Services and Markets Act 2023, which grants HM Treasury power to bring stablecoins into the UK regulatory perimeter. The report identifies three specific concerns with the proposals: first, the proposed consumer holding limits on systemic stablecoins; second, the requirement that backing assets be held in unremunerated central bank reserves or equivalent instruments; third, the restriction that would prevent commercial banks from issuing their own fiat-backed stablecoins.
Stablecoin issuers seeking UK authorisation, commercial banks evaluating digital currency issuance, payment service providers integrating stablecoins into payment rails, and cryptoasset firms with UK market access each need to assess the Committee's recommendations alongside the FCA's and BoE's forthcoming final rules. The holding-limit question is material for retail payment use cases: limits set too conservatively reduce stablecoin utility for everyday transactions, while limits set too broadly could direct systemic risk into the stablecoin sector.
The Committee's report carries persuasive authority only; HM Treasury, the FCA, and the Bank of England are not required to accept its recommendations. The Government has not committed to a legislative timeline for bringing the full stablecoin regime into force. The report adds parliamentary pressure for a faster implementation timetable, which the Committee explicitly supports.
Licentium advises stablecoin issuers, cryptoasset firms, and payment service providers on UK regulatory strategy, FCA authorisation, and BoE engagement for digital asset compliance. We may assist directly or through our UK regulatory partner network. Work we undertake includes UK cryptoasset regulatory authorisation, stablecoin compliance analysis, Financial Services and Markets Act 2023 scoping, and engagement with FCA and Bank of England policy consultations.