US and UK Align Stablecoin Standards Amid Regulatory Shift

Senior officials from the US Treasury and HM Treasury, alongside representatives from the Federal Reserve, SEC, and the Bank of England, convened on July 8 to address the evolving landscape of digital finance. While the discussions produced no binding agreements, the sessions marked a significant effort to align standards for stablecoin backing, custody, and insolvency protections. Both nations emphasized that stablecoins functioning as money must maintain one-to-one backing with high-quality liquid assets to ensure financial stability.

Evolving Regulatory Frameworks

The Bank of England has recently adjusted its approach to systemic stablecoins, replacing rigid individual holding limits with a £40 billion issuance cap. This shift, combined with a reduction in required non-interest-bearing deposits from 40% to 30%, reflects a broader goal to keep stablecoin businesses commercially viable while maintaining consumer safeguards. Meanwhile, the US continues to build out its federal framework under the GENIUS Act, leaving issuers to navigate separate, though increasingly similar, regulatory requirements in both jurisdictions. The two governments now aim to explore pathways for mutual recognition, with the next formal meeting of the working group scheduled for early 2027.