Circle Supports the UK’s Vision for Stablecoins and Innovation

Circle recently submitted responses to the UK Financial Conduct Authority’s consultations on the proposed regulatory approach for stablecoin issuance, custody, and the prudential treatment of cryptoasset firms. This long awaited step builds on recent momentum and affirms the government’s intention to “make the U.K. a great place for digital asset companies to invest and innovate” as announced by Chancellor Reeves in April. 

Circle has long supported the UK’s ambition to position itself as a global hub for fintech and digital assets. The FCA’s consultations reflect this ambition, proposing a regime that balances consumer protection with proportionate oversight—enabling firms like Circle to continue innovating in a safe and transparent environment. As a global issuer of fully-reserved fiat-backed stablecoins—USDC and EURC—Circle is encouraged by the UK’s efforts to distinguish between various stablecoin models and ensure that only tokens backed by the highest-quality, liquid assets and redeemable at par maintain the public trust necessary to serve as reliable qualifying stablecoins in the regime.

Topline recommendations from Circle’s responses:

• Support for a principles-based regime: Circle invites the FCA to adopt a proportionate, outcomes-driven approach to regulating stablecoin issuance and custody, aligned with international frameworks like the EU’s MiCA rules and the U.S. GENIUS Act.
• Backing assets should prioritize safety and liquidity: Circle welcomes the proposed inclusion of short-term government instruments and reverse repos in the reserve composition, while recommending central bank access for non-bank issuers to mitigate credit risk.
• Redemption must remain operationally viable: Circle encourages a shift from prescriptive timelines (e.g., T+1) to outcome-based standards that mirror approaches in other jurisdictions, such as “redeemable at any time” under EU’s MiCA rules.
• Support cross-border harmonization and reciprocal recognition: Circle stresses the importance of jurisdiction-neutral treatment of qualifying stablecoins, cautioning against models that create fragmentation and undermine the principle of the singleness of money.
• Tailored prudential regime for stablecoin issuers: In response to the proposed prudential regime, Circle advocates the FCA adopt a risk-sensitive framework that focuses on operational and technological resilience rather than treating stablecoin issuers as investment firms.
• Transparency and safeguarding: Circle supports regular reserve attestation, safeguarding through bankruptcy-remote structures, and clear segregation of customer assets, consistent with Circle’s current global practices.
• Third-party arrangements: Circle recommends flexibility in rules covering third parties involved in stablecoin issuance, especially to prevent friction in wholesale distribution models that are critical to global liquidity.

These responses underscore Circle’s commitment to constructive regulatory engagement and its belief that the UK is poised to lead in digital finance innovation—if it continues to foster an agile, interoperable, and globally consistent framework for stablecoins and crypto assets.

Circle appreciates the FCA’s openness in seeking industry input and looks forward to continued collaboration to ensure the UK’s regulatory approach supports both innovation and safety.