U.S. -UK cryptocurrency agreement sets directions, not binding rules

The United States and Britain issued ten recommendations on stablecoins and tokenized securities, but did not form mandatory rules.

The United States and the United Kingdom recently issued ten recommendations on stablecoins, tokenized securities and cross-border finance, but these proposals did not form enforceable rules.

Summary

The ten recommendations cover digital assets, capital markets, and cooperation between US and UK regulators. A proposed one-year industry group will test cross-border applications of tokenized financial assets. The two governments hope to open a path for regulated stablecoins to enter each other's markets. Frank Hepworth said that in the absence of domestic rules, the recommendations would have very limited direct impact on the market.

Transatlantic Working Group issues recommendations

The Transatlantic Future Markets Working Group issued the recommendations on July 14, setting priorities for cooperation between the world's two major financial centers, but not replacing any country's regulatory process. The working group was established in September 2025 and co-sponsored by U.S. Treasury Secretary Scott Bessent and British Chancellor of the Exchequer Rachel Reeves. Members come from the U.S. Treasury Department, the Federal Reserve, the Securities and Exchange Commission, the Commodity Futures Trading Commission, as well as the Bank of England and the Financial Conduct Authority.

Five of the recommendations cover digital assets, and the remaining five cover capital raising, foreign issuer requirements, comprehensive market data, swap transaction regulation, and international accounting standards.

US-UK crypto cooperation focuses on tokenization market

Under the first proposal, the two governments plan to establish a private sector-led tokenized finance group. The group will operate for a year, testing cross-border transactions and sharing technical and regulatory practices with the public sector.

Regulators will also examine how their rules treat tokenized assets. The report pointed out that the U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, the UK's Financial Conduct Authority and the Bank of England will consider adopting a common approach in terms of settlement finality, regulatory treatment and market infrastructure.

One area under review is whether stablecoins and tokenized money market funds qualify as margin collateral for central counterparties. Any decision will depend on the individual work of the relevant agencies, as the working group has no authority to approve new collateral or change existing market rules.

Tokenized securities have entered active regulatory discussions between the two countries. In July this year, the UK selected HSBC's Orion platform for its first blockchain-based sovereign bond, which is scheduled to be issued in the Bank of England and the Financial Conduct Authority's digital securities sandbox in early 2027.

U.S. regulators are reviewing similar issues involving ownership records and investor rights. According to previous reports, the U.S. Securities and Exchange Commission postponed work on exemptions for tokenized shares in May after the exchange expressed concerns about non-affiliated companies issuing blockchain certificates representing public shares.

Hepworth said suppressing digital asset technology could put any country behind jurisdictions that allow regulated development. In his view, the working group represents an effort to adjust financial regulation while maintaining the competitive position of London and New York.

Access to stablecoins depends on domestic implementation

The U.S. -U.S. -UK stablecoins Joint Statement issued concurrently with these recommendations supports the establishment of a path whereby stablecoins regulated in one country can ultimately be made available or used in another country. Officials said any arrangement should safeguard financial stability, consumer protection, market integrity and safeguards against illegal financial activity. The statement also supports one-to-one reserve support and protects holder rights in the event of issuer bankruptcy.

Currently, this statement does not establish any mutual access mechanism. Regulators must decide how overseas stablecoin issuers will qualify, which domestic requirements will still apply, and how regulatory responsibilities will be divided among authorities.

Hepworth pointed out that the two countries are coordinating stablecoins, tokenized securities and cross-border access so that their regulatory systems can remain effective as technology develops. But he warned that the cooperation document itself would not change the legal status of the issuer, exchange or investor. He said the ten recommendations released in July 2025 did not themselves create binding rules. They establish regulatory priorities and areas for cooperation, while the actual rules will still be set domestically.

The lack of binding terms means that these recommendations will not grant licenses, establish rights of way or remove compliance obligations in any jurisdiction. Companies seeking to enter the U.S. or U.K. market must continue to comply with applicable legal and licensing requirements in their respective market.

U.S. rules still need to be improved under the GENIUS Act

For U.S. issuers and investors, implementation depends in part on the GENIUS Act. The bill, signed by President Donald Trump in July 2025, establishes a federal framework for paying stablecoins, including one-to-one reserve requirements, issuer restrictions, monthly information disclosures, and federal or eligible state regulations.

The Treasury Department has proposed separate rules for state regulatory systems and anti-money laundering and sanctions compliance requirements. Issuers with no more than $10 billion in outstanding tokens may use state regulation if the Treasury determines that the state framework is substantially similar to federal standards.

Federal agencies failed to meet the July 18, 2026 legal deadline to complete all necessary regulations. According to reports, multiple rule packages, including customer identification and anti-money laundering measures, are still incomplete. Missing the deadline does not automatically delay implementation of the law. The GENIUS Act is scheduled to take effect on January 18, 2027, unless the final regulation determines an earlier effective date based on its timetable.

The working group also asked both countries to support a targeted review of the Basel Committee on Banking Supervision's prudential standards on crypto-assets. The report said US and British officials would seek standards that are technically neutral, evidence-based and consistent across financial centers.

UK stablecoin rules are advancing on different timetables

UK regulators are advancing their work through different frameworks. The UK's Financial Conduct Authority will oversee most UK stablecoin issuers and regulated crypto activity, while the Bank of England will oversee sterling stablecoins deemed systemically important by the UK Treasury.

In June this year, the Bank of England abandoned its proposed individual holding cap and proposed a £ 40 billion issuance limit for each systemic stablecoin. Its framework would allow issuers to invest up to 70% of their reserves in short-term government debt, with the rest placed in interest-free central bank deposits. The BoE is accepting comments on its draft guidelines by September 22 and plans to finalise the requirements by the end of 2026. Regulated systemic stablecoins are expected to start operating under the framework in 2027. [TAG

Hepworth said the on-chain market will continue to evolve while officials work out the applicable rules. He added that regulators must strike a balance between international competition and financial regulation traditionally exercised by governments through banks.

The UK Financial Conduct Authority's authorization window for companies entering the new UK crypto regime will last from September 30, 2026 to February 28, 2027. The approved rules will apply when the mandatory framework takes effect on October 25, 2027.