Revolut Chosen for UK FCA Stablecoin Test Despite Regulatory Hurdles | FT.com
The UK’s Financial Conduct Authority (FCA) has selected Revolut, alongside Monee Financial Technologies, ReStabilise, and VVTX, to participate in a sandbox program testing the viability of stablecoins within the UK’s regulatory framework. The move signals a degree of confidence in the fintech firm despite ongoing scrutiny regarding its full banking license and other regulatory approvals.
The FCA announced , that the four companies were chosen from a pool of 20 applicants to trial stablecoin products in a “safe environment,” focusing on use cases including payments, wholesale settlement, and crypto trading. The testing, which begins in the first quarter of 2026, is designed to inform the final rules governing stablecoins in the UK, expected later in 2026.
Revolut’s inclusion in the sandbox is notable given its protracted journey towards securing a full UK banking license. While the company secured a UK banking license in 2024, it remains in a “mobilisation” phase, limiting its banking division to holding a maximum of £50,000 in deposits. This phase, typically lasting 12 months according to the Bank of England’s Prudential Regulation Authority (PRA), has now extended beyond 18 months for Revolut, with both the company and the PRA stating that the duration is not fixed.
Beyond the banking license, Revolut is also awaiting approval from the FCA to provide consumer credit services to its 11 million UK customers, having applied for this approval in 2024. This ongoing regulatory scrutiny underscores the challenges faced by the rapidly growing fintech as it seeks to navigate the UK’s evolving financial regulations.
The FCA’s focus on stablecoins comes as the UK seeks to establish itself as a competitive hub for digital assets. Stablecoins, cryptocurrencies designed to maintain a stable value relative to a traditional asset like the British pound, are seen as a crucial component of the digital asset ecosystem, facilitating faster and more efficient payments and settlements. Revolut is exploring a pound-denominated stablecoin pegged to sterling, backed by UK “reserve assets,” intended for use within its platform and the broader crypto ecosystem.
Matthew Long, director of payments and digital assets at the FCA, emphasized the importance of ensuring trust in stablecoin issuers. “We are supporting UK stablecoin issuers to ensure they can be trusted for payments, settlement and trading,” he said, adding that this would “benefit consumers and financial transactions” and contribute to the FCA’s broader strategy and the Government’s National Payments Vision.
The sandbox program allows companies to test their products in a controlled, real-world environment with real customers, providing valuable data and feedback to regulators. This approach is intended to foster innovation while mitigating risks and ensuring consumer protection. The FCA received 20 applications for the stablecoin cohort, highlighting the significant interest in this emerging technology.
The UK’s move to establish a clear regulatory framework for stablecoins is also driven by a desire to compete with other jurisdictions, such as the European Union and the United States, which have already implemented stablecoin legislation. Crypto companies have previously voiced concerns that UK rules are more restrictive than those in other countries, and have been lobbying against proposed limitations on stablecoin holdings and capital requirements for issuers.
The broader context of this regulatory push includes the government’s ambition to become “the global leader in tokenisation,” as stated by City minister Lucy Rigby. This ambition is reflected in the launch of a digital securities sandbox, run jointly by the BoE and FCA, to test innovations related to the creation of digital tokens for traditional capital market securities like bonds and equities. Sixteen companies have already entered this sandbox.
Revolut expressed its enthusiasm for participating in the FCA’s sandbox, stating, “We are very pleased to have been accepted to join… and are firm believers in driving forward growth and innovation within our home market’s financial services sector. We will begin work this quarter on testing a stablecoin.”
The FCA’s testing will primarily focus on the issuance of stablecoins, assessing how these digital assets function within the proposed regulatory framework. The findings from the sandbox program will be crucial in shaping the final rules governing stablecoins in the UK, aiming to strike a balance between fostering innovation and protecting consumers and financial stability.