The Financial Conduct Authority has chosen four companies to trial stablecoin services under proposed regulations. The initiative is part of the FCA’s Regulatory Sandbox, which allows firms to test products in real-world conditions with safeguards.The sandbox follows the FCA’s broader work on crypto regulation. Last month, it opened a consultation on final rules for cryptoasset firms, with responses accepted until 12 March 2026.FCA Begins Testing Stablecoin Issuance ProgramThe FCA received 20 applications and selected Monee Financial Technologies, ReStabilise, Revolut, and VVTX. Testing will focus on stablecoin issuance. The proposals cover different use cases, including payments, wholesale settlement, and crypto trading.Matthew Long, director of payments and digital assets at the FCA, said the regulator is “supporting UK stablecoin issuers to ensure they can be trusted for payments, settlement and trading,” adding that the work will “benefit consumers and financial transactions” and contribute to the FCA’s strategy and the Government’s National Payments Vision.Stablecoin Testing Part of Regulatory ReviewFirms in the sandbox will receive feedback from FCA specialists. The findings will inform the UK’s stablecoin rules, expected to be finalised later in 2026. Testing is scheduled to begin in the first quarter of 2026.The FCA described the sandbox as part of a broader effort to enable innovation in UK financial services. It complements initiatives such as the Digital Securities Sandbox.Sandbox Firms Must Obtain Full AuthorisationAll firms in the sandbox will need to be authorised under the new crypto regime once it launches in October 2027. The application gateway opens in September 2026.The FCA has previously consulted on multiple aspects of crypto regulation, including stablecoin issuance, cryptoasset custody, prudential rules, conduct of business, and market abuse. The consultations are now largely complete, and policy statements are expected this summer. This article was written by Tareq Sikder at www.financemagnates.com.

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