UK and US Set Out Joint Stablecoin Principles for Cross-Border Use
Key Takeaways
- 01The UK and US support stablecoins as a means of enabling cross-border payments, settlement and capital-markets activity.
- 02Stablecoins held out as money should be backed at least one-to-one by high-quality, liquid reserve assets.
- 03Issuers should segregate reserves from their own funds, support timely redemption and clearly disclose holders’ legal rights.
- 04Both governments support insolvency frameworks that protect holders’ claims on reserves, potentially ahead of other creditors.
- 05The countries intend to explore a reciprocal market-access pathway for stablecoins issued in the other jurisdiction.
The UK and United States have issued a joint statement backing stablecoins as a tool for digital-money innovation and cross-border finance. The governments intend to develop clear, consistent and proportionate regulatory and supervisory routes for stablecoins, while seeking comparable regulatory outcomes for comparable risks.
The statement’s purpose is to support safe, sound and stable growth in stablecoin use, including for cross-border payments, settlement and capital-markets transactions. It also seeks to reduce regulatory fragmentation that could make international stablecoin arrangements less efficient or discourage competition.
The two countries say stablecoins marketed as money should be backed at least one-to-one by high-quality, liquid assets. Their respective frameworks are expected to define eligible reserve assets. They also support prudential rules on reserves and liquidity that manage financial-stability and insolvency risks without requiring unnecessarily high levels of locally ring-fenced assets.
Regulated issuers would be expected to maintain strong custody, segregation and safeguarding arrangements for reserves. Reserve assets should be separate from an issuer’s own funds and protected for stablecoin holders. Issuers should be prepared to redeem stablecoins promptly and disclose clearly the legal rights attached to holding them.
The governments also support frameworks that give holders a clear and protected claim on reserves if an issuer enters insolvency, bankruptcy, restructuring or resolution. They envisage that holders’ claims should rank ahead of other creditors, subject to each jurisdiction’s laws, and that cross-border failure proceedings should involve appropriate international coordination.
For issuers, exchanges, custodians and institutional users, the statement signals UK-US support for regulated stablecoins in payments, securities and commodities settlement, and tokenised financial markets. It also supports fair, risk-based access by lawful regulated stablecoin and digital-asset businesses to banking and other financial services.
The statement is a shared policy direction rather than a new binding rulebook. The UK and US intend to explore a formal pathway that would allow stablecoins issued and regulated in one country to access the other country’s market, subject to domestic legal and regulatory processes.