Can sterling stablecoins catch digital dollars in 2026? ‘This isn’t about competing,’ says CEO

Core Insights - The UK's financial regulator has identified stablecoins pegged to the national currency as a key priority for 2026, aiming to establish clear regulations early in the market's development [1][2] - The Bank of England is conducting consultations to understand the impact of private sector money issuance on the economy, indicating a proactive approach to regulation [1][2] Industry Overview - The stablecoin market in the UK is currently valued at just over £5 million, significantly smaller compared to the US market, which has a total stablecoin value of $308 billion, with Tether and Circle dominating [3] - Tether's UST is valued at $186 billion, while Circle's USDC is at $72 billion, together accounting for 83% of the total stablecoin market [3] Regulatory Framework - The Bank of England has proposed five key pillars for stablecoin regulation in the UK, focusing on safety and competitiveness [5] - The first pillar requires that at least 40% of a stablecoin's backing assets be held with the Bank of England, with the remainder in higher-yielding gilts [6] - The second pillar mandates that customers should be able to redeem one stablecoin for £1 in fiat by the end of the business day [6] - A controversial third pillar proposes a cap on individual stablecoin holdings between £10,000 and £20,000, while businesses would be limited to £10 million [7]