The UK and United States have set out a common regulatory direction for stablecoins and committed to exploring cross-market access, bringing transatlantic digital settlement closer while stopping short of automatic recognition between their regimes.

HM Treasury and the US Treasury have agreed that stablecoins presented as money should be backed at least one-to-one by high-quality liquid assets, offer reliable redemption, segregate reserves from issuers’ own funds, and give holders clear protection if an issuer fails.

The governments also want regulated stablecoins to be usable for payments, capital-markets settlement, and tokenised financial activity. Subject to domestic law and supervision, they will examine a route allowing a stablecoin issued in one jurisdiction to enter the other market.

The joint statement forms part of a wider programme on capital markets and digital assets established through the Transatlantic Taskforce for Markets of the Future.

Common principles do not create a passport

The statement gives issuers and financial institutions a clearer view of the outcomes both governments want, but it does not grant immediate market access. The UK and US are still developing their domestic regimes, while regulators must decide whether another jurisdiction’s rules, supervision, insolvency arrangements, and enforcement produce comparable protection.

Reserve composition will be one source of detailed negotiation. Describing assets as high quality and liquid establishes a principle, but regulators must still define eligible instruments, maturities, concentration limits, custody, reporting, and independent assurance.

Redemption is equally operational. Holders need to know who has the legal obligation to return conventional money, how quickly a request must be met, what fees apply, and whether access continues during market stress. A one-to-one reserve promise is of limited use when assets cannot be mobilised quickly or holders rank behind other creditors.

The governments want to avoid disproportionate ring-fencing that fragments liquidity between markets. That could improve capital efficiency, although supervisors will need confidence that reserves held across borders remain accessible when an issuer, custodian, or banking partner fails.

Settlement requires more than regulatory agreement

Carl Grimstad, chief executive and co-founder of stablecoin payments company Lydian, described the statement as an attempt to create a shared regulatory language around reserves, redemption, and insolvency, while warning that policy alignment would not complete the underlying payment.

“Regulators can shake hands. The rails still have to talk to each other,” Grimstad said.

A UK-regulated stablecoin interacting with US markets still requires banking relationships, compliant on- and off-ramps, liquidity, identity controls, sanctions screening, transaction monitoring, custody, and connections to the venues where settlement occurs.

Financial institutions must also decide how stablecoins fit alongside tokenised deposits, central-bank money, existing payment systems, and tokenised money-market funds. The statement supports a market containing several forms of digital money rather than assuming that one instrument will replace the others.

Commercial adoption is most plausible where stablecoins remove a measurable friction, such as settlement outside banking hours, movement of collateral, or cross-border transactions involving several intermediaries. A token does not improve a process when compliance, reconciliation, liquidity, and currency-conversion costs remain unchanged.

European businesses operating beyond Britain face another regulatory layer through the EU’s Markets in Crypto-Assets framework. A stablecoin accepted between the UK and US would not automatically receive equivalent treatment across the European Economic Area, leaving international issuers to manage several major regimes.

The statement nevertheless reduces the likelihood that Britain and America will develop wholly incompatible rules. Comparable standards can support future recognition and give banks, payment companies, and market infrastructure providers a firmer basis for investment.

The remaining work is legal, technical, and operational. Cross-border access becomes useful when reserves, claims, compliance systems, banking partners, liquidity, and settlement networks function together under stress, rather than when two governments merely express a shared preference for interoperability.