Britain's financial market regulator on Wednesday published proposals for the issuance of stablecoins ahead of national rules for the pound-pegged cryptocurrency being laid down next year.
Stablecoins -- a form of digital currency linked to real-world money, unlike bitcoin -- "have the potential to drive efficiency in payments", in particular across borders, the Financial Conduct Authority (FCA) said in a statement.
The regulator's proposals include having firms that issue stablecoins safeguard the cryptocurrency for clients, similar to the way banks do, by ensuring both security and easy access.
It also wants issuers to guarantee the value of stablecoins by giving clients the option of selling them back, and for them to set aside asset reserves -- for instance, of one-year bonds -- equivalent to the value of the stablecoins made available.
The FCA invited public comment on the proposals so they could be refined before final rules are published in 2026.
"At present, crypto is largely unregulated in the UK. We want to strike a balance in support of a sector that enables innovation and is underpinned by market integrity and trust," said the FCA director for digital finance David Geale.