UK House of Lords don open inquiry on sterling stablecoins and di proposed regulation

Di UK House of Lords Financial Services Regulation Committee don start formal inquiry into growth and how dem wan regulate stablecoins. Dem set deadline for written submissions as 11 March 2026. Committee dey look for evidence about how the global stablecoin market don develop since 2014, comparisons with US and EU, how sterling‑denominated stablecoins fit grow, use cases, and wetin be current UK regulatory barriers. Dem go assess risks and opportunities for UK economy and financial stability, plus possible impacts on Bank of England (BoE), Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). This inquiry follow series of regulatory moves: FCA name locally issued stablecoins as 2026 priority and in December 2025 dem issue consultations covering issuance, custody and prudential regime. Proposed FCA measures include third‑party custodians for reserves, segregation of reserve assets, 5% on‑demand reserve minimum, ban on paying interest to holders, direct redemption rights with one business day execution, and permanent minimum capital requirement of £350,000. BoE also signal rules for “systemic stablecoins” — tokens wey many people use for UK payments — with final rules targeted in 2026 and proposals wey fit require at least 40% of reserves to dey held at BoE and to consider issuer access to BoE accounts and liquidity backstops. Regulators warn say wide adoption of stablecoins fit drain bank deposits and reduce bank lending capacity. FCA plan open regulatory sandbox to stablecoin experiments and to publish final rules this year, but primary legislation wey go give FCA explicit digital‑asset rulemaking powers still dey draft. Lords inquiry fit influence or revise FCA/BoE approach, so regulatory path for UK‑issued sterling stablecoins still uncertain even though government dey push things. For traders, this mean regulatory design and timing remain key drivers of market structure, custody requirements, issuance viability and potential on‑ and off‑ramp liquidity for sterling stablecoins.