FCA Handbook - CRYPTO 2 Stablecoins

You are viewing CRYPTO 2 Stablecoins as it appeared on 25/10/2027. The current version of CRYPTO 2 Stablecoins was last updated on 25/10/2027.

Guidance

Rules

Related resources

CRYPTO 2.1 Application and purpose

(1) This chapter of CRYPTO contains rules and guidance relating to qualifying stablecoin activities.
(2) CRYPTO 2 is relevant to qualifying stablecoin issuers.
(3) CRYPTO 2 applies as described in this section unless the application provisions of a section or a rule make it clear that the section or rule in question is applied differently.

Purpose

The purpose of this chapter is to set out the detailed obligations which are specific to the activity of issuing a qualifying stablecoin.

The detailed obligations which apply to the activity of issuing a qualifying stablecoin aim to ensure (among other things):

(1) that the holder of a qualifying stablecoin will always have a claim for the redemption sum of their qualifying stablecoin against a qualifying stablecoin issuer;
(2) that there is sufficient transparency by a qualifying stablecoin issuer about matters which are important to:
1. (a) the stability of a qualifying stablecoin; and
2. (b) the ability of a potential holder of a qualifying stablecoin to make an informed decision as to the risks, benefits, rights and obligations associated with becoming a holder of that asset.

Who?

This chapter applies to a firm that is issuing a qualifying stablecoin.

What?

All the rules in CRYPTO 2 apply in relation to any qualifying stablecoins within a qualifying stablecoin product that includes a UK qualifying stablecoin.

The definition of qualifying stablecoin product refers to a category of fungible qualifying stablecoins that make up a single product. A qualifying stablecoin product may include pre-issued stablecoins.

A firm which relies on another person (a ‘third party’) to carry out any part of the activity of issuing a qualifying stablecoin must ensure that all of the activities described in article 9M of the Regulated Activities Order are carried out in a way that complies with the rules in CRYPTO 2 and CASS 16.

Where?

This chapter applies to a firm issuing a qualifying stablecoin by way of business in the UK.

CRYPTO 2.1.8R applies whether or not the person to whom a qualifying stablecoin is issued or who becomes the holder of that qualifying stablecoin is in the UK.

CRYPTO 2.2 General requirements

Building a qualifying stablecoin

A firm must understand and appropriately manage the risks associated with the design and build of a qualifying stablecoin.

Subject to CRYPTO 2.2.3R, a process by which a firm can demonstrate that it understands and has appropriately managed the risks associated with the design and build of a qualifying stablecoin must be carried out before the firm offers a qualifying stablecoin for sale or subscription (within the meaning of article 9M of the Regulated Activities Order).

(1) In respect of pre-issued stablecoins, the process in CRYPTO 2.2.2R must be carried out as soon as is reasonably practicable after 25 October 2027.
(2) Where a firm becomes a qualifying stablecoin issuer by assuming obligations to the holder of a qualifying stablecoin under the process in article 9M(4)(b) of the Regulated Activities Order, the process in CRYPTO 2.2.2R must be carried out as soon as is reasonably practicable after that assumption.

CRYPTO 2.3 Appointment of third parties

Application

The general application of CRYPTO 2 is set out in CRYPTO 2.1.

This section applies to activities that are critical for the performance of, or amount to part of, the regulated activity of issuing a qualifying stablecoin, including:

(1) the making or accepting of an offer to buy or subscribe to a qualifying stablecoin;
(2) the redemption of a qualifying stablecoin; and
(3) the carrying out of activities designed to maintain the stable value of a qualifying stablecoin, other than the provision of accounts referred to in CASS 16.6.1R.

In so far as a firm wishes to engage a third party to carry out activities not within scope of CRYPTO 2.3.2R, including ancillary activities to issuing a qualifying stablecoin, it should consider whether SYSC 8 (Outsourcing) applies to that outsourcing arrangement.

Purpose

Where a firm carries on the activity of issuing a qualifying stablecoin, it may choose to appoint a third party to carry on one or more parts of that activity. This section sets out the rules that apply to such an appointment by a firm of a third party.

Appointing a third party: general requirements

If a firm appoints a third party in circumstances in which this chapter applies, it must comply with the following conditions:

(1) the appointment of a third party must not result in the delegation by senior personnel of their responsibility;
(2) the relationship and obligations of the firm towards the holders of a qualifying stablecoin under the regulatory system must not be altered;
(3) the conditions with which the firm must comply in order to be authorised and to remain so must not be undermined; and
(4) none of the other conditions subject to which the firm’s authorisation was granted must be removed or modified.

Where a firm appoints a third party in circumstances in which this chapter applies it remains fully responsible for discharging all of its obligations under the regulatory system.

Where a firm appoints a third party to carry on part of the activity of issuing a qualifying stablecoin, the firm will be carrying on, and responsible for, all parts of the activity of issuing a qualifying stablecoin.

Where a firm appoints a third party to carry on part of the activity of issuing a qualifying stablecoin, that appointment does not mean the third party will itself be issuing a qualifying stablecoin as it will not be carrying out all of the elements of that activity (as set out in article 9M of the Regulated Activities Order).

A firm must not appoint or retain a third party to carry on the activity of issuing a qualifying stablecoin on its behalf, or part of that activity, unless the following conditions are met:

(1) the firm has taken reasonable steps to ensure that the third party has sufficient experience in, and is competent to carry on, the activity for which it is engaged;
(2) the firm has assured itself that it can monitor and assess the quality of the service the third party is providing;
(3) the third party will provide a service of an appropriate standard; and
(4) any risks around the appointment of the third party are identified and adequately managed.

A firm must review its arrangements with third parties annually, including at least whether:

(1) the third party continues to have sufficient experience in, and be competent to carry on, the activity for which it is engaged;
(2) the firm is effectively monitoring the quality of the service that the third party is providing;
(3) the third party is providing a service of an appropriate standard; and
(4) any risks around the continued appointment of each third party are identified and adequately managed.

(1) A firm must make a record of the grounds on which it satisfies itself as to the matters in:
1. (a) CRYPTO 2.3.9R; and
2. (b) on each review, CRYPTO 2.3.10R.
(2) A record under (1) must include a record of the firm’s considerations and the conclusions it reached.
(3) A record under (1) must be made on the date the selection is made or the review completed (as the case may be) and must be kept for either:
1. (a) 5 years from that date; or
2. (b) 5 years from the date the firm’s relationship with that third party ends (if later).

A firm must ensure that any money or assets it receives in exchange for a qualifying stablecoin in the process of carrying out the activity of issuing a qualifying stablecoin are received directly by the firm and not at any point received or held by a third party on the firm’s behalf.

A third party appointed by a firm to carry out part of the activity of issuing a qualifying stablecoin which involves offering or selling a qualifying stablecoin must not receive or hold money or assets on the firm’s behalf, and a firm is expected to structure its arrangements with that third party so that this is not necessary.

A firm must ensure that any third party acting on the firm’s behalf prominently displays on its website and any other public communication a statement that it acts on the firm’s behalf.

Appointing a third party: contractual requirements

Where a firm appoints a third party to carry out all or part of the activity of issuing a qualifying stablecoin, it must have in place a contract with that third party which meets all of the following conditions:

(1) it is governed by UK law;
(2) it enables the firm to request, and obliges the third party to provide to the firm, information that is sufficient to enable the firm to meet the rules to which it is subject in the regulatory system;
(3) it enables the firm to request, and obliges the third party to provide to the firm, information for the purposes of enabling the firm to make an informed assessment of whether it is compliant with its obligations under the regulatory system; and
(4) it includes provisions requiring the third party to:
1. (a) promptly forward any complaint it receives relating to the activity of issuing a qualifying stablecoin to the firm;
2. (b) provide appropriate information on the firm’s procedures for the handling of complaints on the third party’s website and in any other communications or medium through which the third party provides key information about the activity of the firm or features of the qualifying stablecoin product to holders; and
3. (c) provide appropriate information on how the holder of a qualifying stablecoin may contact the firm, including making clear what role (if any) the third party plays in customer service on the third party’s website and in any other communications or medium through which the third party provides key information about the activity of the firm or features of the qualifying stablecoin product to holders.

Where a firm appoints a third party to act on its behalf in redeeming a qualifying stablecoin, it must have in place a contract with that third party which includes:

(1) provisions setting out how the third party will handle, process, safeguard and segregate any qualifying stablecoins it receives in the course of the redemption process;
(2) provisions requiring the third party to promptly provide to the firm:
1. (a) information on the number of redemptions carried out by the third party on the firm’s behalf; and
2. (b) information on the monetary values of redemptions carried out by the third party on the firm’s behalf;
(3) provisions requiring the third party to provide information on expected redemption time frames to customers seeking redemption, and specifying the information to be provided;
(4) provisions requiring the third party to redeem qualifying stablecoins in accordance with CRYPTO 2.4.14R, including in respect of timeframes;
(5) provisions requiring the third party to:
1. (a) immediately notify the firm in the event of exceptional circumstances which may require the suspension of redemption, as set out in CRYPTO 2.4.24R and CRYPTO 2.4.25G; and
2. (b) where it makes such a notification, immediately provide the firm with all information and/or documentation available to it about those exceptional circumstances;
(6) provisions prohibiting the third party from suspending its service of redemption unless either:
1. (a) it has written agreement or instruction to do so from the firm; or
2. (b) continuing with redemption would be contrary to a legal requirement to which the third party is subject;
(7) provisions requiring the third party to make available to the firm the public address or addresses to which qualifying stablecoins that are the subject of a redemption request are to be sent by the holder; and
(8) provisions requiring the third party to process redemptions in the order based on the fair and objective criteria the firm has determined under CRYPTO 2.4.21R.

In the event that the firm receives a notification from a third party carrying out redemption on its behalf that there may be exceptional circumstances which require the suspension of redemption, it must consider whether the conditions in CRYPTO 2.4.24R are met.

CRYPTO 2.4 Issuance and redemption

Application

The general application of CRYPTO 2 is set out in CRYPTO 2.1.

Purpose

This section sets out requirements and guidance for firms in relation to issuing a qualifying stablecoin, including the redemption of a qualifying stablecoin.

Issuance

A firm must not offer, or arrange for another person to offer, a qualifying stablecoin for sale or subscription (within the meaning of article 9M of the Regulated Activities Order) other than in exchange for money or a UK qualifying stablecoin.

Where a firm receives money or a UK qualifying stablecoin from a person for the purchase of a qualifying stablecoin, it must send a qualifying stablecoin to that person’s nominated blockchain address immediately and at reference value.

Redemption

A firm must redeem a qualifying stablecoin it has issued at any time on receipt of a valid redemption request.

A firm must ensure:

(1) that there is a contract between the qualifying stablecoin issuer and any person to whom it issues a qualifying stablecoin which clearly and prominently states the conditions of redemption, including any fees in relation to redemption; and
(2) that the obligations it owes under that contract to redeem that qualifying stablecoin are effectively transferred in law along with the qualifying stablecoin, such that when the qualifying stablecoin transfers to a new person, that person acquires the same rights against the firm in respect of the redemption of that qualifying stablecoin.

CRYPTO 2.4.6R does not require qualifying stablecoin issuers to enter into new bilateral contracts every time the qualifying stablecoin is transferred on the secondary market. There are a number of different mechanisms that could be used to comply with CRYPTO 2.4.6R(2). Firms could, for example, enter into a deed poll or provide for the legal assignment of the rights. The most appropriate model for a firm will depend on its particular circumstances and business model. Firms must ensure that whatever method they use is legally effective to ensure compliance with CRYPTO 2.4.6R(2).

The conditions of redemption must not:

(1) impose any minimum redemption quantity; or
(2) impose conditions which are onerous or difficult for a holder to meet.

(1) Examples of conditions which might be onerous or difficult to meet are:
1. (a) a contractual requirement to have an account with a particular UK credit institution before redemption can be carried out; or
2. (b) unreasonable restrictions to the payment methods made available to holders seeking redemption, such that the holder will incur unnecessary cost or difficulty in receiving or accessing their redemption sum.
(2) Examples of conditions which would not be considered onerous or difficult to meet are reasonable and proportionate processes to comply with requirements under the Money Laundering Regulations.

When a qualifying stablecoin holder enquires with a firm about redemption, the firm must provide appropriate information to that qualifying stablecoin holder about:

(1) the payment methods the firm makes available for redemption; and
(2) the likely timeframes within which the qualifying stablecoin holder will receive the redemption sum using those payment methods.

The information in CRYPTO 2.4.10R must be provided before the holder confirms the preferred payment method by which they will receive the redemption sum.

CRYPTO 2.4.10R and CRYPTO 2.4.11R apply to a firm even where that firm offers redemption through a third party. In these circumstances, one way of meeting these obligations is for a firm to ensure that a qualifying stablecoin holder receives information from a third party on the firm’s behalf.

In order to give a holder informed choice about which payment method to select, information about timeframes will not be appropriate unless it is based on research about past timeframes achievable by different payment methods, including recent historical data.

On receipt of a valid redemption request, a firm must ensure that redemption is completed:

(1) at the value of the redemption sum;
(2) unless the holder requests a different currency, in money (excluding electronic money) denominated in the reference currency; and
(3) as soon as practicable but no later than the end of the business day following the day on which the qualifying stablecoin is received.

For the purpose of calculating the redemption sum in CRYPTO 2.4.14R(1), the value of the backing asset pool is irrelevant.

A redemption request is valid if it is made:

(1) by the holder of a qualifying stablecoin; and
(2) in a manner which meets any terms and conditions in:
1. (a) the contract between the qualifying stablecoin issuer and qualifying stablecoin holder; or
2. (b) the mechanism used to comply with CRYPTO 2.4.6R(2).

Where the terms and conditions of the contract between the qualifying stablecoin issuer and the qualifying stablecoin holder, or of the mechanism used to comply with CRYPTO 2.4.6R(2), do not meet the requirements of CRYPTO 2.4.6R or CRYPTO 2.4.8R, those terms and conditions are to be ignored when considering the validity of the redemption request under CRYPTO 2.4.16R(2).

Unless CRYPTO 2.4.19R applies, for the purposes of CRYPTO 2.4.14R(3), a redemption is completed when a payment order instructing the transfer of the redemption sum from the firm to the holder has been made.

Where a firm operates a payment account for a holder and credits the redemption sum to that account without needing to transfer the redemption sum to another payment service provider, redemption is complete at the point the firm credits the redemption sum to the holder’s payment account.

The time limit in CRYPTO 2.4.14R(3) does not apply where:

(1) the completion of a particular redemption request within that time limit would cause the firm to be in breach of any legal requirement or court order, including those contained in or made under the Terrorism Act 2000, the Proceeds of Crime Act 2002 or the Money Laundering Regulations;
(2) all of the following are met:
1. (a) the holder of the qualifying stablecoin requests redemption in a currency other than the reference currency;
2. (b) the currency exchange required to meet that request takes more time to carry out than meeting a request in the reference currency; and
3. (c) the firm has made clear to the holder, at the point at which the holder enquired about redemption, the likely timeframe within which redemption in the currency requested will be completed; or
(3) redemption of the qualifying stablecoin is suspended under CRYPTO 2.4.24R.

Order of redemptions

A firm must complete redemptions in an order which is based on fair and objective criteria and which does not prejudice, directly or indirectly, the interests of any particular type of holder.

Security of redeemed stablecoins

Where a firm receives a qualifying stablecoin in the course of carrying out, or in connection with, a redemption, it must within 24 hours either:

(1) record that qualifying stablecoin as part of the relevant stablecoin pool; or
(2) ensure that the relevant qualifying stablecoin is burned.

Where a firm records a qualifying stablecoin as part of the relevant stablecoin pool under CRYPTO 2.4.22R(1), it must ensure it adds any money or assets to the relevant backing asset pool necessary to ensure compliance with CASS 16.2.1R(3).

Suspension of redemption

A firm must suspend all redemption where:

(1) there is an exceptional circumstance which threatens the integrity of the relevant qualifying stablecoin product or the interests of the holders of the relevant qualifying stablecoin product;
(2) the firm has taken all reasonable steps to respond to the exceptional circumstance in such a way that does not involve suspending all redemption; and
(3) the firm concludes on a proper basis that temporarily suspending all redemption is necessary to protect the rights of holders of a qualifying stablecoin or the integrity of that qualifying stablecoin.

Exceptional circumstances in CRYPTO 2.4.24R(1) are likely to include:

(1) the failure of the underlying distributed ledger technology or other infrastructure on which the qualifying stablecoin product relies;
(2) the failure of a system upon which the firm or a third party relies to carry out redemption;
(3) a sudden loss of confidence in the relevant qualifying stablecoin product such that the firm or a third party who carries out redemption on behalf of the firm receives an exceptionally high number by volume or value of redemption requests; or
(4) the insolvency of the firm.

Exceptional circumstances in CRYPTO 2.4.24R(1) are unlikely to include:

(1) the suspension of trading of the relevant qualifying stablecoin product on a secondary market, unless that suspension of trading is caused by a sudden loss of confidence in that qualifying stablecoin product as set out in CRYPTO 2.4.25G(3); or
(2) the insolvency of a third party carrying out redemption on behalf of the firm, unless that insolvency threatens the integrity of the relevant qualifying stablecoin product or the interests of the holders of the relevant qualifying stablecoin product.

(1) Where the exceptional circumstance in CRYPTO 2.4.24R(1) causes, or is caused by, an inability of the firm to resolve a shortfall in accordance with CASS 16.4.15R(2), reasonable steps for the purposes of CRYPTO 2.4.24R(2) would include the firm exploring whether it can source additional resources or liquidity in order to continue to meet redemptions.
(2) Where a third party carrying out redemption on behalf of a qualifying stablecoin issuer becomes insolvent in a way that amounts to an exceptional circumstance (eg, through threatening the interests of holders), reasonable steps for the purposes of CRYPTO 2.4.24R(2) would include the firm exploring whether redemption of the relevant qualifying stablecoin product can continue through other third parties or directly by the firm.

A firm which suspends redemption must:

(1) immediately notify the FCA as to:
1. (a) the fact it has suspended redemption;
2. (b) the period of time for which it is anticipated that redemption will be suspended; and
3. (c) the reason why it has suspended redemption; and
(2) immediately notify in writing all third parties who carry out redemption on the firm’s behalf.

All third parties who carry out redemption on behalf of a firm should be informed where a decision to suspend all redemption is taken.

A firm that has suspended redemption must restart redemption as soon as possible, but no earlier than when:

(1) a reconciliation has been completed which confirms that CASS 16.2.1R(3) is satisfied in respect of the backing asset pool; and
(2) the firm has:
1. (a) formulated a plan as to how and when it will restart redemption;
2. (b) promptly submitted the plan in (a) to the FCA, ensuring a reasonable period between submission and restarting redemption, and in any event not less than 5 business days unless a shorter period is agreed with the FCA; and
3. (c) assured itself that the reason notified to the FCA under CRYPTO 2.4.28R(1)(c) for the suspension of redemption has been remedied and is no longer likely to impact the firm’s ability to meet redemption requests.

The plan referred to in CRYPTO 2.4.30R(2) should at least cover the following:

(1) the firm’s forecast as to the anticipated number of redemption requests within the 14 redemption days which follow the restarting of redemption;
(2) the proportion of the backing asset pool that is held, and that should continue to be held, in core backing assets, and the period over which any adjustments needed to that proportion of core backing assets will take place;
(3) how proposed adjustments to the proportion of core backing assets could impact on the markets for expanded backing assets or core backing assets over the period set out in (2);
(4) consideration as to how the firm meets, and will continue to meet, wider obligations under the regulatory system; and
(5) an explanation as to how the firm has assured itself of the matter at CRYPTO 2.4.30R(2)(c).

Redemption fees

Redemption may be subject to a fee only where:

(1) the fee is:
1. (a) stated in the contract between the qualifying stablecoin issuer and the holder of the qualifying stablecoin in accordance with CRYPTO 2.4.6R(1); or
2. (b) provided for by the mechanism used to comply with CRYPTO 2.4.6R(2); and
(2) the fee is proportionate and commensurate solely with the operational costs actually incurred by the qualifying stablecoin issuer in respect of that redemption and does not include costs or losses incurred through the sale of core backing assets or expanded backing assets.

A firm must not charge a fee for redemption that is greater than the value of the qualifying stablecoins to which that redemption request relates.

CRYPTO 2.5 Stablecoin disclosures

Application

The general application of CRYPTO 2 is set out in CRYPTO 2.1.

Purpose

This section sets out requirements for firms about:

(1) the information that must be published online about a qualifying stablecoin product, including the type of information and the frequency with which this information must be reviewed and updated; and
(2) the production, publication and updating of a stablecoin QCDD.

Relevance of other obligations

The obligations set out in this section about the publication of information by firms are in addition to any other obligations imposed on a firm by the regulatory system. A firm should be aware that the publication of information in accordance with this chapter may also be subject to additional and overlapping obligations.

Obligation to publish information about a qualifying stablecoin

If a firm is the qualifying stablecoin issuer of more than one qualifying stablecoin product, the rules in this section must be read as applying separately for each qualifying stablecoin product.

The effect of CRYPTO 2.5.4R is that a firm must publish, review and update separate information for each qualifying stablecoin product it issues.

Website disclosures

In respect of each qualifying stablecoin product for which a firm is the qualifying stablecoin issuer, it must publish and maintain the following information on its website:

(1) the general information referred to in CRYPTO 2.5.25R;
(2) the backing asset pool information referred to in CRYPTO 2.5.27R;
(3) the redemption information referred to in CRYPTO 2.5.30R;
(4) the information on risks referred to in CRYPTO 2.5.31R;
(5) the review information referred to in CRYPTO 2.5.32R and CRYPTO 2.5.37R;
(6) the following identifying information:
1. (a) the name and LEI (where eligible) that is included on the GLEIF Global LEI Index of the person who is the qualifying stablecoin issuer; and
2. (b) the qualifying stablecoin product identifier; and
(7) so far as not referred to in (1) to (6), the information set out at regulation 13 (General requirements to be met by a qualifying cryptoasset disclosure document or supplementary disclosure document) of the Cryptoassets Regulations which is included in the stablecoin QCDD.

A firm must ensure that the information published under CRYPTO 2.5.6R:

(1) is easy for prospective readers to locate;
(2) is easy for prospective readers to access; and
(3) includes:
1. (a) the date and time of publication of each part of the information; and
2. (b) the last date and time each part of the information was updated or amended.

A firm must ensure that the information that it publishes under CRYPTO 2.5.6R is clear, fair and not misleading.

In complying with CRYPTO 2.5.8R, a firm should consider what is appropriate and proportionate, taking into account the means of communication and the fact that a firm should assume that the information it publishes will be read by retail customers.

When publishing information on its website in accordance with CRYPTO 2.5.6R, a firm should:

(1) explain or present information in a logical manner;
(2) use plain and intelligible language and, where use of jargon or technical terms is unavoidable, explain the meaning of any jargon or technical terms as simply as possible;
(3) make key information prominent and easy to identify, including by means of:
1. (a) headings and layout;
2. (b) display and font attributes of text; and
3. (c) design devices such as tables, bullet points, graphs, graphics, audio-visuals and interactive media;
(4) avoid unnecessary disclaimers; and
(5) provide an appropriate level of detail.

The rules in this section do not require a firm to publish all the information listed in CRYPTO 2.5.6R together as a single document or webpage. A firm should choose the best format for publishing the information in line with the rules of this section and of the regulatory system.

When publishing information on its website in accordance with CRYPTO 2.5.6R, a firm should consider whether to provide additional information to help support a reader’s understanding. In doing so, a firm should ensure that it does not obscure the information referred to CRYPTO 2.5.6R.

Website disclosures: timing of publication

Subject to CRYPTO 2.5.14R, a firm must comply with the requirements in CRYPTO 2.5.6R by the earliest of the following times:

(1) when the corresponding qualifying stablecoin is offered for sale or subscription (within the meaning of article 9M of the Regulated Activities Order); or
(2) when the firm seeks to admit the qualifying stablecoin to trading on a qualifying cryptoasset trading platform.

In relation to pre-issued stablecoins, a firm must comply with the requirements in CRYPTO 2.5.6R on the first day that rule comes into force.

Website disclosures: obligation to review and update

A firm must update the following information on its website at least once every 3 months:

(1) the information referred to in CRYPTO 2.5.25R(1) (the total number of qualifying stablecoins); and
(2) the information referred to in CRYPTO 2.5.27R (backing asset pool information).

A firm must update the following information on its website if, and to the extent that, any of it becomes inaccurate:

(1) the general information referred to in CRYPTO 2.5.25R(2) and (3);
(2) the redemption information referred to in CRYPTO 2.5.30R; and
(3) the information on risks referred to in CRYPTO 2.5.31R.

A firm must have systems in place to regularly review the information listed in CRYPTO 2.5.16R to ensure any inaccuracies in the information it has published are promptly identified and corrected.

The updates required by CRYPTO 2.5.15R and CRYPTO 2.5.16R must be published as soon as reasonably practicable.

(1) The information that must be updated under CRYPTO 2.5.15R is not the same kind of information as that which must be updated under CRYPTO 2.5.16R.
(2) The information referred to in CRYPTO 2.5.15R is likely to change frequently. CRYPTO 2.5.15R requires a firm to, at a minimum, update it once every 3 months.
(3) The information referred to in CRYPTO 2.5.16R – being the remaining general information (the technology and third parties involved in issuing), the redemption information and information about risks – is likely to be more static. CRYPTO 2.5.16R requires a firm to update that information whenever it becomes inaccurate.

The review information referred to in CRYPTO 2.5.32R and CRYPTO 2.5.37R is not caught by either CRYPTO 2.5.15R or CRYPTO 2.5.16R. That information is point-in-time and will instead be periodically produced in accordance with CRYPTO 2.5.32R and CRYPTO 2.5.37R.

CRYPTO 2.5.15R requires information to be reviewed at least once every 3 months. Firms should consider whether to do so more frequently if there are any significant relevant changes, such as if they decide to hold expanded backing assets.

In complying with CRYPTO 2.5.15R, a firm has discretion to align the timing with other obligations under the regulatory system or to accommodate other commercial or practical considerations. For example, a firm could update disclosures after 1 month if doing so assists in aligning with reporting or other obligations.

Website disclosure: obligation to retain and provide information

(1) A firm must retain a copy of the information published in accordance with CRYPTO 2.5.6R for 5 years from the date it is no longer published on its website.
(2) A firm must provide a copy of any information retained in accordance with this rule on request to the following without undue delay:
1. (a) any holder of the qualifying stablecoin; and
2. (b) any former holder in respect of the time when they were a holder of the qualifying stablecoin.

CRYPTO 2.5.23R(2) does not prevent a firm from charging for the provision of the information. However, firms are reminded of PRIN 2A.6.2R(4), under which they must ensure retail customers do not face unreasonable additional costs.

General information to be published

The general information to be published for each qualifying stablecoin product is:

(1) the total number of qualifying stablecoins which:
1. (a) are in circulation or subject to subscription (within the meaning of article 9M of the Regulated Activities Order);
2. (b) are being offered for sale or subscription (within the meaning of article 9M of the Regulated Activities Order) for the first time, but which have not yet been sold or subscribed; and
3. (c) have been minted but not yet offered for sale or subscription (within the meaning of article 9M of the Regulated Activities Order),
at a given point in time, selected in accordance with CRYPTO 2.5.29R;
(2) a description of the technology used to support the recording or storage of data for the relevant qualifying stablecoin (such as the distributed ledger technology), including any protocol and consensus mechanism; and
(3) the name of any person with whom the qualifying stablecoin issuer has made arrangements to:
1. (a) offer the qualifying stablecoins for sale or subscription (within the meaning of article 9M of the Regulated Activities Order);
2. (b) undertake on behalf of the qualifying stablecoin issuer to redeem the qualifying stablecoins; and/or
3. (c) carry on activities on behalf of the qualified stablecoin issuer designed to maintain the stable value of the qualifying stablecoin.

The rule in CRYPTO 2.5.25R(1) to publish the total number of qualifying stablecoins includes qualifying stablecoins that a person has arranged for another to sell or subscribe, offer for sale or subscription, or mint on its behalf.

Backing asset pool information to be published

The backing asset pool information to be published for each qualifying stablecoin product is:

(1) the name of any third party or third parties appointed by the firm with which it holds more than 20% of the value of the backing asset pool;
(2) the value of the backing asset pool held by the firm at a point in time selected in accordance with CRYPTO 2.5.29R, expressed in terms of the reference currency and described with the following detail:
1. (a) the total value held;
2. (b) the value(s) held as core backing assets, broken down into the type(s) of asset(s); and
3. (c) if relevant, the value(s) held as expanded backing assets, broken down into the type(s) of asset(s); and
(3) the value(s) referred to in (2)(b) and (c) also expressed as a percentage of the total value of the backing asset pool.

CRYPTO 2.5.27R(2)(b) and (c) refer to the types of assets held. This means firms should publish the values for:

(1) on-demand deposits;
(2) short-term government debt instruments;
(3) long-term government debt instruments;
(4) units in a fund authorised as a public debt CNAV MMF; and
(5) assets, rights and money held as a counterparty to a repurchase transaction.

For the purposes of CRYPTO 2.5.25R(1) and CRYPTO 2.5.27R(2), the given point in time that a firm selects must be:

(1) the same point in time for both of those rules; and
(2) no more than 24 hours prior to the date when the firm intends to publish the information referred to in those rules which references the point in time selected.

Redemption information to be published

The redemption information to be published for each qualifying stablecoin product is:

(1) an explanation of any redemption fee that may be payable by a holder, including how such a fee will be calculated;
(2) the steps that a holder must take in order to redeem the qualifying stablecoin, including a list of any information that a holder may be asked to provide as part of a redemption request;
(3) a summary of the steps that will be taken by the firm or other parties involved in the redemption process following a request to redeem; and
(4) the payment methods the firm makes available for redemption.

Risk information to be published

A firm must publish information about risks associated with the qualifying stablecoin product and any steps taken by the firm to manage such risks, including:

(1) risks associated with the technology used to support the qualifying stablecoins;
(2) risks to the interests of a holder, including those arising from any conflicts of interest; and
(3) risks to the ability of the qualifying stablecoin issuer to continue maintaining the stability or value of the qualifying stablecoin product.

Review information to be published

Each time a firm updates the information in CRYPTO 2.5.15R, it must:

(1) prepare a statement confirming whether the backing asset pool for that qualifying stablecoin product complies with CASS 16.2.1R(3);
(2) have the statement approved by its governing body or an appropriate senior manager; and
(3) publish the approved statement.

Obligation to conduct and publish an independent review

Subject to CRYPTO 2.5.34R, at least once every 12 months, a firm must undertake an independent review of the statements it has published over the previous 12 months in accordance with CRYPTO 2.5.32R.

The first independent review under CRYPTO 2.5.33R must take place within 3 months of the date a firm publishes its fourth statement under CRYPTO 2.5.32R.

The independent review referred to in CRYPTO 2.5.33R must provide an opinion prepared in line with a reasonable assurance engagement as to whether the relevant statements published by the qualifying stablecoin issuer were accurate.

The independent review referred to in CRYPTO 2.5.33R must be conducted by a person who, at a minimum:

(1) is neither an employee nor an agent of the firm;
(2) is not a member of the same group as the firm; and
(3) meets (a), (b) or (c) below:
1. (a) is eligible for appointment as an auditor under chapters 1, 2 and 6 of Part 42 of the Companies Act 2006;
2. (b) has otherwise been appointed as an auditor under another enactment, and meets the requirements for appointment under that enactment; or
3. (c) is overseas and is eligible for appointment as an auditor under any applicable equivalent laws of the country or territory in which they are established.

As soon as practicable following the independent review referred to in CRYPTO 2.5.33R, the firm must publish a statement prepared by the person conducting the independent review, confirming:

(1) the date the independent review took place;
(2) the overall outcome of the independent review; and
(3) the relevant qualifications of the person who conducted the independent review.

Stablecoin qualifying cryptoasset disclosure documents

Under regulation 6 of the Cryptoassets Regulations, the definition of a qualifying cryptoasset disclosure document can include a document whose publication is required by designated activity rules. For the avoidance of doubt, CRYPTO 2.5.39R to CRYPTO 2.5.57G are made under both regulation 9 of the Cryptoassets Regulations and related powers, and section 137A of the Act and related powers.

A firm must:

(1) publish a valid stablecoin QCDD (see CRYPTO 2.5.43R) on its own website; and
(2) upload the stablecoin QCDD in (1) to the FCA-owned centralised repository.

For the purposes of regulation 12 (Responsibility for disclosure documents) of the Cryptoassets Regulations, the person responsible for a stablecoin QCDD is the qualifying stablecoin issuer of the qualifying stablecoin product it relates to (whether or not the stablecoin QCDD is published or distributed by another person).

A stablecoin QCDD must:

(1) be clearly headed ‘[name of qualifying stablecoin product] disclosure document’;
(2) contain the material information set out at regulation 13 (General requirements to be met by a qualifying cryptoasset disclosure document or supplementary disclosure document) of the Cryptoassets Regulations;
(3) be written in English;
(4) be a single document in a format which is immutable;
(5) clearly state:
1. (a) the date and time of publication of each part of the document; and
2. (b) the last time each part of the document was updated or amended; and
(6) contain:
1. (a) the name and any LEI that is included on the GLEIF Global LEI Index of the person who is the qualifying stablecoin issuer; and
2. (b) the qualifying stablecoin product identifier.

In the FCA’s view, a stablecoin QCDD should not need to contain the same information in all cases as a QCDD relating to other qualifying cryptoassets. That is because of the nature of UK qualifying stablecoins and because they are subject to a greater degree of regulation by the FCA.

For the purposes of CRYPTO 2.5.39R, a stablecoin QCDD is valid if it:

(1) complies with CRYPTO 2.5.41R; and
(2) has been reviewed and updated where appropriate in accordance with CRYPTO 2.5.48R and CRYPTO 2.5.49R.

Stablecoin QCDD: timing of publication

Subject to CRYPTO 2.5.45R, a firm must comply with the requirements in CRYPTO 2.5.39R by the earliest of the following times:

(1) when the corresponding qualifying stablecoin is offered for sale or subscription (within the meaning of article 9M of the Regulated Activities Order); or
(2) when the firm seeks to admit the qualifying stablecoin to trading on a qualifying cryptoasset trading platform.

In relation to pre-issued stablecoins, a firm must comply with the requirements in CRYPTO 2.5.39R on the first day that the rule comes into force.

Stablecoin QCDD: provision of hyperlink to a cryptoasset trading platform

A firm that seeks admission to trading of a UK qualifying stablecoin must provide the UK QCATP operator with a hyperlink to the relevant stablecoin QCDD on the FCA-owned centralised repository at the time that admission is sought.

The hyperlink provided under CRYPTO 2.5.46R must be a permalink which leads to the latest available document on the FCA-owned centralised repository such that, so far as is within the firm’s control, it automatically updates to the latest version of the stablecoin QCDD when updates are made to that document by the firm under CRYPTO 2.5.48R and CRYPTO 2.5.49R.

Stablecoin QCDD: obligation to review and update

A firm must update its stablecoin QCDD at least once every 3 months.

Any information referred to in CRYPTO 2.5.16R that is included in a stablecoin QCDD must be updated if, and to the extent that, any of it becomes inaccurate.

A firm must have systems in place to regularly review the information referred to in CRYPTO 2.5.49R to ensure any inaccuracies in the information it has published are promptly identified and corrected.

The updates required by CRYPTO 2.5.48R and CRYPTO 2.5.49R must be published and uploaded to the FCA-owned centralised repository as soon as reasonably practicable.

CRYPTO 2.5.48R requires stablecoin QCDDs to be updated at least once every 3 months. Firms should consider whether to do so more frequently if there are any significant relevant changes, such as if they decide to hold expanded backing assets.

In complying with CRYPTO 2.5.48R, a firm has discretion to align the timing with other obligations under the regulatory system or to accommodate other commercial or practical considerations. For example, a firm could update a stablecoin QCDD after 1 month to align with reporting or other obligations.

Stablecoin QCDD: obligation to retain and provide copies

(1) A firm must retain a copy of any stablecoin QCCD published in accordance with CRYPTO 2.5.39R for 5 years from the date it is updated or removed from its website.
(2) A firm must provide a copy of any stablecoin QCCD retained in accordance with this rule on request to the following without undue delay:
1. (a) any holder of the qualifying stablecoin; and
2. (b) any former holder in respect of the time when they were a holder of the qualifying stablecoin.

CRYPTO 2.5.54R(2) does not prevent a firm from charging for the provision of the stablecoin QCDD. However, firms are reminded of PRIN 2A.6.2R(4) under which they must ensure retail customers do not face unreasonable additional costs.

Information in website disclosures and stablecoin QCDDs

Where information appears on a firm’s website in accordance with CRYPTO 2.5.6R and in a stablecoin QCDD published by that firm in accordance with CRYPTO 2.5.39R(1):

(1) the information must be updated at the same time under CRYPTO 2.5.15R and CRYPTO 2.5.48R, or CRYPTO 2.5.16R and CRYPTO 2.5.49R; and
(2) the updates must be published and uploaded at the same time so far as reasonably practicable without delaying their publication in any location to do so.

Under CRYPTO 2.5.56R, firms are required to align updates to their website disclosure and stablecoin QCDDs where they contain the same information. Firms are also required to try to align the publication and uploading of the updates, but should not delay publication to do so. However, they should align the timings as much as they can.

Point In Time

25/10/2027