Major jurisdictions are moving in similar directions, yet at different speeds and based on distinct policy priorities. While the UK’s new regime marks a major step towards regulatory clarity in digital-asset markets, it also underscores that global consistency remains unlikely and regulatory divergence is expected to persist.
One of the reasons for this divergence is the focus of each jurisdiction on its own monetary sovereignty and financial stability. Stablecoin adoption is accelerating across corporates, financial institutions and retail users, yet 99% of market capitalisation remains dollar‑denominated. That dollar-dominance has created concerns in the EU and the UK. Authorities are therefore prioritising frameworks that support the emergence of competitive sterling‑ and euro‑denominated assets.
None of the main regimes currently offers equivalence or mutual recognition, and their parallel development is likely to deepen fragmentation. Cross-border firms will need to manage an expanding distinct set of jurisdiction-specific obligations. With limited prospects for passporting or equivalence, firms must prepare to operate across multiple but non-aligned frameworks while maintaining operational consistency, safeguarding compliance, and sustaining innovation.
Against this backdrop, firms operating internationally need to make strategic decisions now.
"Digital‑asset regulation is advancing rapidly globally, with apparent signs of fragmentation. As they consider where to scale their digital‑asset business across major markets, firms must navigate multiple authorisations, cross‑border compliance, and the need for robust oversight across divergent regimes."
Gregory Marchat Partner - Group Financial Services Leader
The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 entered into force in February 2026, bringing crypto-asset activities formally within the UK financial regulatory perimeter. The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have already shaped much of the rulebook through extensive consultations. Firms now face early strategic decisions on authorisation, governance, and operating models.
The Financial Services and Markets Act (FSMA) regulatory perimeter has extended to crypto-asset activities offered in the UK above £500,000 in total value. Any firm serving UK customers will require UK authorisation. The regime is activity‑based and deliberately broad, capturing stablecoin issuance, custody, trading platforms, staking, and other crypto‑asset services. This wide scope signals the UK’s intention to integrate crypto‑assets fully into its existing supervisory model.
Unlike the EU, which introduced a standalone regulation through the Markets in Crypto‑Assets Regulation (MiCA), the UK is embedding crypto-asset activities into existing FSMA architecture. Firms will be subject to core FCA rulebook chapters, including Systems and Controls (SYSC) and Conduct of Business (COBS), with heightened expectations for business models, governance, staffing, and controls. This creates a distinct supervisory philosophy and introduces additional complexity for cross-border firms navigating several regimes.
While much of the regime is already defined, certain prudential and operational standards will only be clarified once the FCA and PRA publish final rules. Firms therefore need to remain alert to further detail over the coming months.
The UK framework focuses exclusively on sterling‑denominated stablecoins. Firms offering euro‑ or dollar‑denominated stablecoins would therefore be unable to market them in the UK and would need tailor products to each jurisdiction.
The framework also differentiates supervisory approaches and requirements for stablecoin issuers and stablecoin payment providers based on their market significance, with a higher compliance bar applied for large players.
The FCA will supervise most firms, while the PRA will oversee systemic stablecoin issuers and systemic payment systems.
For systemic operators, requirements are more stringent:
Systemic designation by HM Treasury will depend on usage and financial stability implications; an expectation that may capture larger financial institutions entering the crypto‑assets ecosystem. These requirements challenge business models not only from a remuneration perspective but also operationally. The practical implementation of holding limits, for example, requires significant live monitoring of accounts and transactions.
When comparing to the EU, MiCA also contains enhanced rules for “significant” stablecoin issuers but with different thresholds and supervisory expectations. While MiCA requires 60% of reserves to be held as deposits in credit institutions, it does not mandate that those deposits be unremunerated. The UK approach is therefore more demanding and may shape stablecoin business models differently.
Divergence in thresholds, reserve composition, and supervisory oversight means firms active in both jurisdictions cannot rely on a single operating model. Jurisdiction‑specific prudential and reporting rules increase costs for cross‑border issuers.
The authorisation window will run from September 2026 to February 2027. All firms must apply:
The FCA encourages firms to engage early through its Pre-Application Support Service (PASS) meetings available from July 2026. With limited transitional arrangements and no fast‑track procedures, firms must make decisions this year on structure, staffing, systems, and whether their business models can meet FSMA‑level expectations.
The UK is not the only jurisdiction progressing toward a comprehensive regime for digital assets.
The EU has already implemented harmonised requirements through MiCA. Discussions in the United States continue to shape a future federal market‑structure. South Africa has brought virtual‑asset service providers under existing financial regulation, and several Asian jurisdictions — including Hong Kong, Singapore and Japan — have accelerated regulatory development.
Hong Kong aims to position itself as the region’s regulated institutional hub, its virtual asset regime has been fully implemented since June 2023. Its stablecoin regime, in force since August 2025, requires full reserve backing and licensing for any issuer operating locally, with the first licences expected in Q1 2026. Hong Kong’s regime structure differs from the UK’s unified approach, operating a dual licensing framework. Draft legislation signals a move to a broader activity‑based framework.
Singapore has also finalised a stablecoin regime that remains broadly consistent with MiCA, while continuing to support tokenised finance and advance a CBDC programme. Japan, meanwhile, is moving in a direction closer to the UK by bringing crypto-assets within the discipline of more traditional financial regulation, including mandatory disclosures and established supervisory expectations.
For cross‑border firms, this creates additional operational complexity: multiple licences, divergent disclosures, differing reserve models and parallel supervisory expectations, all of which still need to be supported by consistent global governance and controls.
A key point of divergence is the breadth of activities captured under the different regimes. The FCA intends to regulate areas such as staking, borrowing, and lending, which remain outside MiCA’s current perimeter. This signals the UK’s intention to supervise a wider set of crypto‑asset activities and may have practical implications for firms operating across multiple jurisdictions.
Another area for fragmentation is in the requirement for domestic incorporation. The FCA requires UK retail customers to maintain a relationship with a UK legal entity, forcing international firms to combine a UK subsidiary with a UK-authorised branch of an overseas entity. This mirrors GENIUS’ obligation to hold stablecoin reserve in the US for tokens offered to US customers. MiCA imposes similar geographic constraints by requiring the issuer and CASPS to be established in the Union as a legal person. Hong Kong’s extraterritorial regulatory reach is narrower: according to the active marketing test, an overseas digital‑asset service provider becomes subject to the regulation only when it actively markets to the public in Hong Kong. Therefore, cross‑border providers can generally avoid Hong Kong’s regime if they do not target Hong Kong’s investors.
In practice, firms operating cross-border must be legally incorporated into the different jurisdictions, tailor their product to the national regulation, apply to be licensed and maintain adequate reserve and reporting requirements in each of the jurisdictions. These requirements create duplication and increase operational and capital costs for international firms.
Equivalence is also limited, since neither the UK regime nor MiCA offers a practical framework. The UK regime applies extraterritorially to firms serving UK customers, while MiCA provides internal EU passporting but no external equivalence. The United States also offers no general equivalence mechanism. The result is a market in which firms cannot rely on mutual recognition and must instead prepare for multiple standalone regimes.
“Consistency in the composition of eligible reserve assets across jurisdictions is essential to preserving stablecoin stability and preventing regulatory arbitrage that could distort issuers’ profitability.”
Alexandre Poser Global co-Head Digital Assets, & co-head of Quants - France Partner at Forvis Mazars
The United States has crypto-assets high on the regulatory agenda.
The GENIUS Act, adopted in July 2025, created the first federal framework for payment stablecoins. Unlike the UK’s broader proposal, the US has focused on clarifying regulatory requirement for a single asset class. Broader rules for other digital‑asset activities are still under debate in Congress. The Senate is examining several market structure bills, including the CLARITY Act that the House passed in July 2025, and further visibility is expected later this year as both the market‑structure legislation and GENIUS Act implementation rules advance.
The GENIUS Act gives federal agencies one year to issue implementing regulations, with certain provisions becoming effective on the earlier of 18 months after enactment or 120 days after final rules are issued. Agencies are now advancing GENIUS Act-related rulemakings, reflecting its multi-regulator implementation model. The Office of the Comptroller of the Currency (OCC) was the first federal banking agency to act, publishing its Notice of Rule Proposal in February 2026. That first set of rules could influence subsequent rulemaking given the OCC’s responsibility foroverseeing federally licensed and large‑scale domestic payment stablecoin issuers, as well as registered foreign payment stablecoin issuers. This proposal translates the GENIUS Act into a supervisory playbook with clearly defined expectations for covered organizations and key stakeholders.
The US OCC proposal is less prescriptive than the UK FCA Consultation Papers. The US OCC Notice of Proposed Rulemaking (NPR) invites for extensive feedback, with more than 200 questions signalling that the agency is still developing its views on several key policy positions.
The NPR proposed list of permissible reserve assets is larger than those permitted under the UK and EU frameworks. Notably, it explicitly permits tokenised versions of eligible reserve instruments. For example, in the EU, the scope of eligible assets is already relatively broad, while in the UK stakeholders have raised questions over whether repos should be explicitly included.
Divergences in eligible‑asset rules may translate into differences in yield and profitability across regimes, incentivising issuers to prioritise one jurisdiction or currency over another and, in turn, amplifying the emerging sovereignty dimensions of digital‑asset markets. Across jurisdictions, the key challenge is to balance an investment scope broad enough to avoid concentration risk, but still prudent enough to preserve liquidity and limit market risk.
Similar to the UK’s more stringent requirements for systemic issuers, the OCC is mandating stricter rules for larger US‑based issuers. Under the OCC NPR, the large issuers must hold 0.5% of reserves as insured deposits or insured shares at an insured depository institution, up to a cap of USD 500 million, a notably lighter requirement than the PRA’s expectations in the UK.
Fragmentation also appears in the prudential space. Unlike MiCA or the UK proposal, the OCC NPR does not impose a standard capital requirement. Instead, it proposes a tailored capital framework calibrated to an issuer’s business model and risk profile, with capital established during licensing and reassessed through ongoing supervision. During an initial de novo period issuers would be subject to a minimum capital floor, after which capital must remain commensurate with the issuer’s business model and risk profile. This case-by-case approach differs markedly from the more prescriptive UK and EU regimes.
These global misalignments translate directly into an uneven playing field. Differences in what issuers can hold — and where — influence cost of capital, yield and liquidity profiles. This regulatory asymmetry shapes where issuers choose to locate their reserves, concentrate their operations, or scale their issuance.
At present, those divergences appear to reinforce the market’s structural tilt towards US-dollar stablecoins.
Against this backdrop, both the EU and the UK are acutely aware of the strategic importance of monetary sovereignty in digital‑asset markets. Neither jurisdiction intends to allow the stablecoin landscape to tilt entirely toward US‑denominated instruments. Their stricter prudential and geographic requirements reflect an attempt to ensure that euro‑ and sterling‑linked tokens are not structurally disadvantaged and that domestic monetary systems retain influence.
A further area of divergence concerns the treatment of foreign issuers under the US framework. Foreign issuers fall within OCC oversight when they offer stablecoins to US customers or rely on US‑based intermediaries. However, the GENIUS Act prohibits foreign entities from being licensed as payment stablecoin issuers in the United States. Instead, access to the US market is only possible through an intermediary, a model similar to the EU and UK approach to legal incorporation.
The US framework adds two cumulative conditions:
These conditions create high barriers to entry, requiring alignment with US standards as well as substantial operational, liquidity‑management and supervisory commitments.
The OCC NPR provides the first concrete implementation rulebook for the US regime, but other agencies have yet to issue substantive implementing regulations. In addition, the FDIC published its own NPR to implement prudential requirements for FDIC-supervised payment stablecoin issuers and FDIC-supervised custodians. The NPR includes requirements related to reserve assets, permissible activities, disclosures, capital, liquidity, and risk-management; provisions regarding supervisory and enforcement authority over FDIC-supervised payment stablecoin issuers; and requirements for FDIC-supervised custodians providing custodial and safekeeping services. Further, the NPR clarifies the applicability of FDIC deposit insurance for payment stablecoins by confirming that payment stablecoins themselves are not insured deposits and that FDIC insurance could apply only at the level of insured depository institutions holding reserve assets, without pass‑through coverage to stablecoin holders.
Taken together, these differences are already producing measurable divergence across regimes, most notably in reserve-management requirements and backing-asset diversification. That fragmented landscape increases the regulatory burden for cross-border firms and may contribute to the gradual emergence of region-specific digital-asset markets.
For more on the development of the US stablecoin framework, read our in-depth analysis of the OCC NPR by Forvis Mazars U.S. Financial Services Regulatory Center.
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As the regulatory landscape evolves, financial institutions face new challenges and opportunities in stablecoin issuance, reserve management, and digital asset compliance. Regardless of the proposal, issuance of payment stablecoin may create new facets of risk or expand upon existing risk.” Bobby Bean, Managing Director, Financial Services Risk & Regulatory Consulting, Forvis Mazars US
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International firms must plan for multiple, unaligned rulebooks across the UK, EU, US and key Asian markets, as regimes advance on separate timelines and offer no equivalence. Operating models will need to adapt to different strategic regulatory environments.
Preparing for multiple authorisation and licensing procedures will be a priority for this year. Firms will have to demonstrate consistent global oversight if they want to operate across all key markets as expect robust governance, risk management, and auditability. With application gateways opening soon, institutions should assess entity structures, licensing pathways and cross‑border compliance capabilities.
The most immediate decisions concern four areas:
Upcoming final rules in the UK and the US will set the global regulatory baseline, and firms that prepare early will be best positioned to operate efficiently across multiple regimes and scale their digital asset business.
Firms should prepare for the UK crypto authorisation window (September 2026–February 2027), engage early with the FCA via PASS meetings from July 2026, and assess now whether their legal structure, systems and resources can meet FSMA‑level regulatory standards.
The key divergence lies in reserve composition, prudential requirements and supervisory oversight across the UK, EU and US. These differences affect yield, liquidity management and compliance costs, meaning firms cannot rely on a single stablecoin operating model across jurisdictions.
Firms should determine where to seek authorisation, how to structure legal entities to meet national incorporation rules, and how to design prudential and reserve models for different regimes, while maintaining consistent global governance and internal controls.
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