The United Kingdom and the United States have jointly released a statement to harmonise their approaches to regulating stablecoins, reflecting a shared recognition of the transformative potential of digital currencies within the global financial system.

In 2025, the Transatlantic Taskforce for Markets of the Future was created by the two governments to set a clear regulatory framework that encourages innovation, ensures financial stability, and supports cross-border interoperability.

Why do stablecoins matter?

Stablecoins, digital assets pegged to fiat currencies or high-quality liquid assets.

They are crucial for making payments more efficient, lowering transaction costs, and allowing quick settlements in both local and international markets.

The UK and US governments recognise that well-regulated stablecoins can modernise financial infrastructure and boost competition, leading to economic growth.

Digital payment systems using stablecoins can reduce settlement times from days to seconds, improving liquidity and capital efficiency in markets.

A core objective of the UK-US partnership is to achieve regulatory convergence where feasible, and reduce fragmentation that can impede innovation and cross-border financial flows.

Both jurisdictions emphasise the need for clear, consistent, and timely legal and supervisory frameworks that address the unique risks posed by stablecoins without imposing disproportionate burdens.

Regulatory divergence in digital assets can create opportunities for regulatory arbitrage, raising systemic risks.

The UK and US address this by aligning requirements to ensure similar outcomes for similar risks, promoting a fair environment while maintaining regulatory independence.

Uniform standards and reserve asset management

A key part here is to ensure that stablecoins are fully backed by real, high-quality assets.

This means that for every stablecoin issued, there should be an equal amount of secure and liquid assets held to support it. This backing helps keep trust and stability in the system.

The UK and US frameworks define eligible reserves as including government securities, cash, and other liquid instruments.

These requirements would prevent excessive ring-fencing that could disrupt markets and reduce efficiency.

Encouraging innovation without overburdening

Both governments recognise the critical role of the private sector in driving digital money innovation and the public sector’s responsibility in safeguarding systemic stability. They recognise the importance of allowing different types of digital money to coexist and compete fairly.

The private sector is important for providing financial services and payment systems. The public sector sets the rules and keeps the system safe. Together, the UK and the US aim to create a space where innovation can grow while also protecting consumers and the financial system.

Mike Walters, CEO at Form3, commented that these joint commitments, including standards on reserve backing, will give banks and payments providers greater confidence to invest in digital money solutions, particularly for cross-border payments.

However, he added that “In order for banks and payment service providers to build stablecoins into their payment offering, they need a transformation of their underlying payment infrastructure. For stablecoin-based payments to operate securely and efficiently, financial institutions need to ensure that their systems are built for both new and traditional forms of money. Having separate systems for each could lead to liquidity challenges and mean that stablecoin payments are not as trusted.”

“Financial institutions should be deploying cloud-based payment infrastructure that can connect, route and orchestrate payments across the market, regardless of the payment rail, network or asset type.”

He stated that this is the only way for banks and fintechs to keep up with the ever-evolving payments landscape and focused on the fact that the underlying infrastructure is very crucial for success.

Custody, transparency, and consumer protection

Improved custody and segregation standards for stablecoin reserves are essential for user confidence.

This includes factors such as transparent disclosure of redemption rights and reserve management practices, which can minimise information asymmetry and strengthen market discipline.

Transparency is important too. The UK and US frameworks mandate that reserve assets be segregated from issuers’ proprietary funds and safeguarded for the benefit of holders.

Cross-border coordination and resolution mechanisms

Given the inherently global nature of stablecoins, the UK and US agree on the necessity of coordinated cross-border regulatory and resolution frameworks.

The partnership supports clear legal rights for stablecoin holders if a company goes bankrupt. This includes giving stablecoin holders priority over other creditors under domestic law.

The UK-US collaboration aims to develop mechanisms for international cooperation, reducing uncertainty and protecting market integrity.

This cooperation is crucial to managing risks in a global digital financial system and ensuring stability even when problems arise.

Making cross-border use easier

Finally, stablecoins issued in one jurisdiction can access the other’s market, subject to regulatory compliance.

Cross-border interoperability can reduce costs as well as increase the speed of international transactions, benefiting remittances, trade finance, and capital markets.

The UK-US framework seeks to establish clear pathways that balance innovation with risk management. It will help businesses and consumers benefit from a more connected financial world.

Laurent Descout, CEO at Neo, said, “The commitment from the UK and US to support well-regulated stablecoins is welcome. Adoption has accelerated rapidly, and stablecoins are increasingly being integrated into payments, settlement and global treasury infrastructure.”

“For businesses, the most important element is the intention to enable their use in cross-border finance. Stablecoins can make international payments faster and more efficient, but broader adoption will depend on clear, interoperable regulation that avoids fragmentation between markets.

“Full, one-to-one backing with high-quality liquid assets will be critical to building trust. The priority now is to translate these shared principles into practical rules that give businesses the confidence to use stablecoins across jurisdictions.”

The UK and US are collaborating on stablecoins to support new digital currencies while ensuring the financial system remains safe and fair.

By working together, governments and markets can achieve both innovation and stability.