TechFlow news, December 29 — UK Finance recently released a report reviewing 2025's cryptocurrency regulatory developments and outlining policy outlook for 2026. The report states that the UK regulatory framework is seeking a balance between the US and EU models, with a particular focus on the positioning and regulation of stablecoins.
Regulators are increasingly classifying stablecoins as payment instruments rather than investment products—a categorization crucial for building targeted regulation. The report raises a key concern: regulatory differences between sterling-backed and non-sterling stablecoins could drive issuers overseas, undermining the UK's control over its financial policies.
2026 will be a pivotal year. The UK must address risks related to multi-currency stablecoins, ensure fair competition between fintech firms and traditional institutions, and determine how stablecoin payments integrate with existing payment systems. The government needs to close the gap between political direction and regulatory details to maintain London’s status as a global financial center.
