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GDF x CCI Response to FCA CP25/14 Stablecoin Issuance and Cryptoasset Custody

GDF and CCI are the two leading global members’ associations representing firms delivering crypto and digital assets solutions. Our members span the digital asset ecosystem and include the leading global crypto exchanges, stablecoin issuers, digital asset Financial Market Infrastructure providers, innovators, and investors operating in the global financial services sector. We also leverage the expertise of CCI’s Proof of Stake Alliance (POSA) whose members represent all corners of the staking industry.
We support a UK stablecoin regime that is robust, proportionate, and internationally competitive. The UK has a time-sensitive opportunity to position itself as a leading home for GBP‑denominated stablecoin issuers. If the regime is overly prescriptive or commercially misaligned, issuers may choose to launch offshore, undermining both competitiveness and regulatory oversight. A principles-based framework aligned with international norms will better support innovation, consumer protection, and market stability.
Our overarching feedback is as follows:

  1. Adopt a Principles-Based Regime – Avoid locking in rigid business model assumptions at this early market stage.
  2. Reframe Redemption vs Conversion – Recognise that redemption is a guarantee of last resort, while conversion is the primary user exit route.
  3. Review T+1 Redemption Requirements – Current proposals undermine reserve flexibility and create systemic liquidity risk.
  4. Clarify Backing Asset Composition – Align with commercial and prudential realities; ensure coherent treatment of “fiat currency.”
  5. Refine Statutory Trust Model – Allow modest overcollateralisation; clarify treatment of yield and consider non-statutory trust options.
  6. Calibrate Custody Requirements – Ensure operational practicality for crypto‑native models, allowing omnibus wallets and proportionate reconciliations.
  7. Maintain International Competitiveness – Avoid prescriptive measures that exceed standards in the EU, US, and Singapore.
  8. Address Multi-Currency Stablecoins – Provide flexibility for diversified currency baskets with appropriate risk management.
  9. Ensure Proportionate Record-Keeping – Focus on issued token supply and reserve reconciliation, leveraging blockchain transparency.
  10. Align with Growth Objectives – Support the UK ambition to “boldly regulate for growth” as outlined in the Mansion House reforms.
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