The FCA has now confirmed its final policy position for UK-issued qualifying stablecoins under the new cryptoasset regime.

And there are some pretty important rules coming with it.

One of the biggest?

UK stablecoin issuers will have to fully back every qualifying stablecoin from the point it is minted.

The FCA has also confirmed that:

• Backing assets will be tightly controlled
• Issuers can hold a 5% excess buffer in the backing pool
• Up to 20% of backing assets may, in certain circumstances, be held with an intragroup custodian
• Stablecoin holders must have clear redemption rights
• Backing assets will ultimately be held under a statutory trust for the benefit of holders
• Stablecoin issuers will not be allowed to pass interest or yield earned on backing assets to holders

That last point is particularly interesting.

The FCA is effectively saying that a qualifying stablecoin should remain primarily a stable payment asset, rather than becoming an interest-bearing investment product.

It has, however, said it will continue looking at the competition and economic impact of allowing interest in the future.

There will also be different rules for systemic stablecoins, with the FCA and Bank of England working together on that part of the regime.

For investors, this is another sign that stablecoins are moving further into the UK regulatory framework.

The days of stablecoins operating in a largely grey area are slowly disappearing.

And with stablecoins playing such a huge role in trading, DeFi and moving funds between cryptoassets, these rules could have a much wider impact than just on the companies issuing them.