No single FCA permission is called a stablecoin licence. A business that uses stablecoins for payments may need a payment institution (PI) authorisation, an electronic money institution (EMI) authorisation, a permission under the FCA's new cryptoasset regime, or a combination of these. The answer depends on what the business actually does, not on the technology it uses.
Using stablecoins only as an internal settlement rail is a different service from letting customers buy, hold, transfer and redeem them. The starting point is always a map of the flow of funds: who receives the customer's money, who holds the tokens, who contracts with the customer, and who pays the beneficiary.
Two developments shape the position in late 2026. The FCA published its final rules for UK-issued qualifying stablecoins in June 2026, and its application window for the new regime opened on 30 September 2026. Separately, HM Treasury consulted from 14 July to 6 October 2026 on modernising payment services regulation, including how tokenised payments fit into the payments framework.
| Activity | Likely permission |
|---|---|
| Issuing a qualifying UK stablecoin | FCA stablecoin issuance permission from 25 October 2027 |
| Holding stablecoins for customers | FCA permission for safeguarding qualifying cryptoassets |
| Buying, selling or arranging stablecoin transactions | FCA dealing or arranging permissions |
| Receiving fiat and paying beneficiaries | Payment institution authorisation |
| Issuing GBP or EUR balances that customers spend | EMI authorisation |
| Stablecoins inside a cross-border payment flow | Payments permission, with crypto permissions if customers hold or exchange tokens |
| Existing PI or EMI adding tokenised payments | Variation of permission, and a crypto permission where needed |
| Stablecoins used only as internal settlement | Depends on customer exposure and the firm's exact role |
Words such as blockchain, wallet or USDC do not settle the question. The full journey, from the customer's payment to the beneficiary's receipt, has to be analysed step by step.
A PI authorisation is needed where the underlying service is a regulated payment service. A common example: a firm accepts GBP from a UK customer, moves value across borders using stablecoins, and pays the beneficiary in local currency. The customer sees an international money transfer and never holds a token.
Using a blockchain does not change the regulated activity. Receiving funds from a payer in order to transmit them to a payee is money remittance, whatever rail sits in the middle. The analysis looks at:
| Item | Authorised payment institution |
|---|---|
| Initial capital | €20,000, €50,000 or €125,000 depending on the services, set in euros by the Payment Services Regulations 2017 |
| FCA application fee | £2,820 or £5,640 depending on the services |
| Statutory decision period | 3 months for a complete application, 12 months for an incomplete one |
| Safeguarding | CASS 15, in force since 7 May 2026, with an annual safeguarding audit and a monthly return |
The firm plans PI authorisations at 6 to 8 months after submission. Smaller firms with average monthly payment volumes up to €3 million can register as a small payment institution instead, for a £1,130 fee. Our UK payment institution licence page sets out both routes.
An EMI licence applies where the business issues electronic money: electronically stored monetary value, issued on receipt of funds, which represents a claim on the issuer and is accepted for payments by people other than the issuer. A customer balance in GBP or EUR held in an app and spent or sent later is the typical example.
E-money and stablecoins can look alike, but they are different regulatory products. Fiat balances issued as e-money stay under the Electronic Money Regulations 2011. A UK-issued qualifying stablecoin falls under the FCA cryptoasset regime and the stablecoin issuance rules. One business can use both, for example issuing GBP e-money to customers while settling with partners in stablecoins.
| Item | Authorised EMI |
|---|---|
| Initial capital | €350,000 |
| FCA application fee | £5,640 (small EMI registration £1,130) |
| Statutory decision period | 3 months for a complete application, 12 months for an incomplete one |
| Safeguarding | CASS 15, with an annual safeguarding audit and a monthly return |
The line between the two products should be drawn before the product is built, because changing it later can mean restructuring the entity and its customer terms. Our UK EMI licence page covers the authorisation in full.
Using a stablecoin issued by someone else does not by itself decide whether FCA authorisation is needed. What matters is how the stablecoin enters the transaction and what role the business plays.
At one end, a payment firm uses a stablecoin only inside its own settlement process with a partner abroad. The customer pays and receives fiat, and never holds or sees the token. The regulated activity is the payment service, and the firm holds a PI or EMI permission for it.
At the other end, a platform lets customers convert GBP into stablecoins, hold them in hosted wallets, send them to others and redeem them into fiat. That model raises payments, cryptoasset dealing, custody, safeguarding and financial crime questions together, and usually needs both a payments permission and FCA crypto permissions.
Using a stablecoin infrastructure provider does not make a fintech unregulated. The fintech can still be inside the perimeter if it receives customer funds, contracts for the regulated service, controls the assets or carries out regulated transactions itself.
UK law treats a stablecoin issued in the UK differently from one issued overseas. The issuance permission covers issuing a qualifying stablecoin in the UK. An overseas-issued stablecoin, such as a dollar coin issued in the US, can still be traded, held and used in the UK through FCA-authorised firms, which carry the duties for their own activities.
HM Treasury's July 2026 consultation set out proposals for certain regulated stablecoins to work as money within the payments framework, not only as cryptoassets, and asked how overseas stablecoins issued under recognised regimes should be treated. The consultation closed on 6 October 2026 and HM Treasury is analysing the responses, so the final position on overseas coins in payments is not yet settled.
When choosing which stablecoins and partners to use, firms should weigh the issuer's regulatory status and the token's role in the customer journey, alongside liquidity, technology and adoption.
A UK customer pays GBP, the firm converts to a dollar stablecoin, sends it to a partner abroad, and the partner pays the beneficiary in local currency. The customer never holds a token. This is money remittance and needs PI authorisation, or SPI registration for smaller volumes. The conversion and transfer of tokens is the firm's own treasury activity, though the partner abroad needs its own local licence.
A platform offers companies an account in which they hold dollar stablecoins alongside GBP and EUR balances, and send either to suppliers. The fiat balances are e-money or payment accounts and need EMI or PI authorisation. Holding the stablecoins for the client is custody, and buying them for the client is dealing or arranging, which need FCA crypto permissions from 25 October 2027.
A processor lets online shoppers pay in stablecoins and pays the merchant in pounds. Receiving value for the merchant and paying out is a payment service, typically merchant acquiring, needing a PI permission. Where the processor exchanges the tokens for the merchant as principal, the dealing permission applies too.
A payroll platform takes GBP from UK employers and pays overseas contractors, who can choose to receive stablecoins into their own wallets. The collection and payout is a payment service. Paying out in tokens the platform buys for the contractor brings in dealing or arranging, and holding the tokens before payout brings in custody.
A business that sells stablecoins to customers for pounds and buys them back is dealing in qualifying cryptoassets and, if it holds the tokens, safeguarding them. It needs FCA crypto permissions from 25 October 2027 and remains subject to the Money Laundering Regulations registration until then. Where it also holds fiat balances for customers between trades, those balances need EMI or PI protection.
In each model the permission follows the step that touches the customer's money or tokens. A firm that runs several models should map each one separately before deciding which entity holds which permission.
Fiat money a PI or EMI receives for a payment, or in exchange for e-money, is protected under CASS 15. The rules have been in force since 7 May 2026 and bring a monthly safeguarding return and an annual safeguarding audit. Stablecoins held for customers are not protected under CASS 15; from 25 October 2027 they come under the FCA's cryptoasset custody rules. A hybrid product needs both sets of controls, and the reconciliation must show at all times which customer money is in fiat and which in tokens.
Cryptoasset businesses already apply the travel rule under the Money Laundering Regulations, passing the originator's and beneficiary's details with each cryptoasset transfer. The FCA expects blockchain analytics to trace where tokens have come from, wallet screening against sanctions lists, a business-wide risk assessment that covers stablecoin flows, and suspicious activity reporting to the National Crime Agency. A payments firm adding stablecoins should extend its existing controls to on-chain activity before launch, not after.
Marketing a cryptoasset product to UK consumers is subject to the FCA's financial promotion rules, including risk warnings, a cooling-off period for first-time investors and appropriateness checks. A payments product that lets customers hold or exchange stablecoins should be reviewed against these rules as well as the Consumer Duty.
The FCA published its final rules for issuing qualifying stablecoins in Policy Statement PS26/10 in June 2026, and the prudential rules in PS26/12. They apply from 25 October 2027 to any firm issuing a qualifying stablecoin in the UK.
Stablecoins that HM Treasury recognises as systemic, because they are widely used for payments, come under joint Bank of England and FCA supervision, with the Bank setting the rules for sterling systemic stablecoins.
Not automatically. A PI or EMI permission covers the payment services and e-money it lists, not every tokenised model. HM Treasury's consultation proposed that authorised and registered payment firms obtain a variation of permission before providing payment services with tokenised money.
Stablecoin services also bring technology, custody, liquidity, redemption, financial crime and third-party dependency risks that fiat models do not. An existing firm should compare the new product with its current permissions and check:
Safeguarding arrangements under CASS 15, financial crime controls, governance, operational resilience and outsourcing oversight may all need updating. Where a new permission is needed, it is added through a variation of permission application; the FCA fee is £1,410 or £565 depending on the change. A crypto activity under the new regime needs its own FSMA permission, applied for in the current window.
Possibly, but not automatically. The UK framework aims to avoid duplicate authorisation, and HM Treasury has been considering how a stablecoin issuance permission interacts with the payments rules when stablecoins are used to make payments.
An issuance permission does not cover everything. Running payment accounts, money remittance, merchant acquiring, card issuing or fiat payments may still need a payments permission. Cryptoasset activities beyond issuance, such as custody, dealing or arranging, each need their own permission. The analysis covers the whole business, not only its main product.
The word wallet covers very different models. A non-custodial wallet, where only the customer controls the private keys, is a software product. A hosted wallet, where the provider controls the assets for the customer, is custody.
From 25 October 2027, safeguarding qualifying cryptoassets for customers is a regulated activity, with a permanent minimum capital of £150,000 and the FCA's custody rules. Where stablecoins are held only briefly as part of a regulated payment transaction, HM Treasury has aimed to reduce overlap between the custody and payments rules, and the outcome of its consultation will confirm how.
Payment and custody permissions are not interchangeable. Who controls the assets, and why they are held, remain the central questions.
An early-stage firm does not always need every permission itself. It can use regulated partners for fiat accounts, payment execution, conversion, custody or card issuing, while owning the customer experience and the technology.
A partner model has to be designed with care. Using an authorised provider underneath does not on its own keep the fintech outside the perimeter. The key questions are:
The structure should be settled before infrastructure providers are chosen and contracts signed. Once integrations and agreements are in place, changing who does what is slower and more expensive.
Stablecoins are now a payments question as much as a cryptoasset question. A business can sit in the payments framework, the cryptoasset regime, or both, depending on what it does rather than how it describes itself.
The order of work that gives a reliable answer:
Firms that issue or operate in other markets too can compare the UK position with the US, EU and Asian regimes in our global stablecoin licence guide.
| Date | Milestone |
|---|---|
| 4 February 2026 | Cryptoassets Regulations 2026 (SI 2026/102) made |
| 7 May 2026 | CASS 15 safeguarding rules for PIs and EMIs in force |
| June 2026 | FCA final rules for the crypto regime, including PS26/10 on stablecoin issuance |
| 14 July to 6 October 2026 | HM Treasury consultation on modernising payment services regulation |
| 30 September 2026 | FCA application window for the crypto regime opened |
| 28 February 2027 | Application window closes |
| 25 October 2027 | Crypto regime commences |
The window is open now. The FCA will review window applications in the order received and aims to decide them before 25 October 2027, so an early, complete file gives the most time for questions. A credible application needs the business model, governance, capital, systems, policies and senior team in place.
Existing payment firms may need to work on both tracks: a crypto permission under the new regime, and any variation of their PI or EMI permission that follows HM Treasury's payments reforms. A hybrid fiat and stablecoin product is best planned as one operating model covering both. Our page on UK cryptoasset authorisation sets out the application file.
The firm has specialised in payment and e-money regulation since 2013, working with fintechs, PIs and EMIs on authorisation, structure and ongoing compliance. For stablecoin and tokenised payment models it covers:
The analysis is most valuable before the technology, banking and infrastructure arrangements are fixed.
Usually yes, but there is no single stablecoin licence. Payment services need a PI or EMI permission, and issuing, holding or dealing in stablecoins for customers needs FCA cryptoasset permissions from 25 October 2027; some models need both.
It can, but its current permission may not cover every tokenised model. HM Treasury has proposed a variation of permission for tokenised payment services, and custody or dealing alongside the payment service needs its own crypto permission.
No. Fiat e-money balances fall under the Electronic Money Regulations 2011, while a UK-issued qualifying stablecoin falls under the FCA cryptoasset regime and the PS26/10 issuance rules.
Not necessarily. If customers pay and receive fiat and never hold the token, the regulated activity is usually the payment service; letting customers buy, hold or transfer stablecoins brings in the crypto permissions.
On 25 October 2027. The FCA application window runs from 30 September 2026 to 28 February 2027.
Own funds of at least the highest of £350,000, the fixed overheads requirement and 1% of the value of coins in issue, under PS26/12.
The consultation on modernising payment services regulation ran from 14 July to 6 October 2026. HM Treasury is analysing responses, and the outcome will confirm how tokenised payments fit into the payments rules.
Buckingham Capital Consulting has obtained FCA authorisations for payment and e-money firms since 2013, including Nexpay, Orbital and Global Send as authorised payment institutions, Dzing Finance and Hryze as EMIs, and a variation of permission for Moneliq. The firm maps stablecoin payment models against the payments, e-money and cryptoasset regimes and prepares each application the model needs.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.