US and UK deepen stablecoin negotiations after GENIUS Act

British and American financial regulators expand discussions on stablecoins, tokenization and digital asset supervision, and the United States begins to implement the GENIUS Act

Summary

The 13th Anglo-American Regulatory Conference was held in London on July 8. U.S. officials informed British regulators about the implementation of the GENIUS Act and the structure of the cryptocurrency market. Both governments support a 1:1 asset reserve of stablecoins and strengthen cross-border regulatory coordination. The Bank of England has replaced the proposed holding limit with a £ 40 billion issuance cap.

British and American regulators discuss stablecoin policies

According to a joint statement issued on August 4, senior officials from the UK Treasury and the US Treasury held the 13th meeting of the Anglo-American Financial Supervision Working Group in London. Representatives from the Bank of England, the Financial Conduct Authority, the Federal Reserve, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency also attended the meeting.

Digital finance was the core topic of the July 8 meeting. U.S. officials briefed their British counterparts on the progress of implementing the GENIUS Act, which establishes a federal framework for payment stablecoins, and informed the United States of continuing work on the broader digital asset market structure. Officials also discussed tokenization, payment modernization and the G20 cross-border payments roadmap. The representative of the United Kingdom provided an update on the country's wholesale financial market digitalization strategy and the appointment of Christopher Woolard as an advocate for wholesale digital markets.

The meeting did not produce new regulations or binding agreements. However, according to the working group's official statement, both sides reiterated their support for "the responsible use and growth of digital assets" while taking into account consumer protection and financial stability.

GENIUS Act increases pressure on UK stablecoin rules

The talks come as the United States moves from stablecoin legislation to implementation, providing a clearer path for issuers and financial institutions to operate under federal rules. The UK is still refining its own framework. The Financial Conduct Authority is expected to oversee the issuance, custody and trading of qualified UK stablecoins, while the Bank of England will jointly supervise stablecoins deemed systemically important.

Coordination has become crucial for U.S. stablecoin issuers seeking access to UK payments and capital markets. Otherwise, differences in reserve requirements, custody rules and bankruptcy protection could force issuers to maintain independent structures in both countries. The two governments addressed this risk in a separate statement from the Transatlantic Working Group on Future Markets on July 14. They said the goal was to promote appropriate convergence without replacing any country's domestic regulatory process. "Stabiloins held as currencies should be fully asset-backed," the two governments said. The joint stablecoin statement requires at least 1:1 high-quality liquid asset reserves, segregated custody and timely redemption, and proposes exploring a path for stablecoins issued in one jurisdiction to enter the other's market.

Bank of England relaxes early restrictions

After listening to industry feedback, the Bank of England has revised some of its stricter stablecoin proposals. In June, the bank abandoned its proposed holding limits of £ 20,000 for individuals and £ 10 million for businesses, replacing them with a temporary issuance cap of £ 40 billion for each systemic stablecoin, allowing users to trade without personal limits. The bank also reduced the proportion of non-interest-bearing central bank deposit reserves that systemic issuers must hold from 40% to 30%. Under a steady-state framework, the remaining 70% of reserves can hold short-term UK government debt.

These adjustments bring the UK closer to the U.S. and U.S. common position that reserve rules should protect holders without creating obstacles that would make stablecoin business commercially difficult. The Bank of England plans to complete the finalization of the systemic stablecoin guidelines by the end of 2026.

The future direction of transatlantic stablecoins

The next stage will depend on how U.S. agencies implement the GENIUS Act and whether the two countries can translate common principles into formal market access arrangements. Key outstanding issues include: the treatment of foreign-issued stablecoins, regulatory mutual recognition between jurisdictions, reserve custody and procedures for handling defaults by cross-border issuers. The Financial Supervision Working Group plans to meet again in early 2027. Prior to this, the July proposal provided policy direction rather than a unified transatlantic regime, leaving issuers still to comply with their respective U.S. and British requirements.