The United States and the United Kingdom have pledged continued collaboration on digital asset regulation, with officials discussing stablecoin frameworks, market structures, and cross-border payment innovations during their 13th meeting of the UK-US Financial Regulatory Working Group (FRWG) in London. A joint statement published on August 4 highlighted progress on stablecoin legislation, including updates on the implementation of the US’s GENIUS Act, which seeks to establish a comprehensive regulatory framework for stablecoins.
The Transatlantic Taskforce for Markets of the Future, established to advance financial innovation, released initial recommendations on July 14, focusing on harmonising regulatory approaches to support technological advancements while mitigating risks. The Bank of England (BoE) is currently evaluating its proposal requiring stablecoin issuers to hold at least 40% of reserves as non-interest-bearing deposits at the central bank, with industry analysts suggesting the measure may be overly restrictive.
The UK’s Financial Conduct Authority (FCA) has identified cross-border payments as a near-term application for stablecoins, citing their potential to enhance efficiency in international transactions. However, uncertainty remains over the UK’s regulatory direction, with industry observers noting a perceived shift in momentum as the US advances its legislative agenda. The BoE’s review of alternative approaches to reserve requirements is ongoing, though no formal conclusions have been announced.
The joint efforts reflect broader transatlantic efforts to balance innovation with financial stability, as both jurisdictions navigate the evolving landscape of digital assets. The UK’s renewed focus on stablecoin regulation is seen by some as a response to the US’s legislative progress, though officials have not explicitly confirmed this alignment.
Written by Steven Cook
Regulation Desk
