US-UK crypto pact sets direction, not binding rules

The United States and the United Kingdom have issued 10 recommendations for stablecoins, tokenized securities, and cross-border finance, although the proposals have not created enforceable rules.
Summary

• Ten recommendations cover digital assets, capital markets, and cooperation between U.S. and UK regulators.
• A proposed one-year industry group would test cross-border uses for tokenized financial assets.
• Both governments want a pathway for regulated stablecoins to enter each other's markets.
• Frank Hepworth said the recommendations produce very little immediate market impact without domestic rules.

The Transatlantic Taskforce for Markets of the Future published the recommendations on July 14, setting priorities for cooperation between two of the world's largest financial centers without replacing either country's regulatory process.

Established in September 2025 by U.S. Treasury Secretary Scott Bessent and UK Chancellor Rachel Reeves, the task force brought together officials from the Treasury departments, the Federal Reserve, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Bank of England, and the Financial Conduct Authority.

Five recommendations deal with digital assets. The remaining five address capital raising, foreign issuer requirements, consolidated market data, swap-trading supervision, and international accounting standards.
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New Market Trading CEO Frank Hepworth told crypto.news that the cooperation responds to a basic conflict between global digital markets and national financial supervision. Crypto assets can move through phones and computers across borders, while governments still apply most financial rules through domestic institutions.

"The US and UK are doing this because they are two of the world's leading financial markets, and both face the same problem: digital assets are accessible globally through any computer or phone, while financial regulation is still imposed nationally, largely through domestic financial institutions," Hepworth said.

US-UK crypto cooperation targets tokenized markets

Under the first recommendation, the governments plan to establish a private-sector-led group for tokenized finance. The group would operate for one year and test cross-border transactions while sharing technical and regulatory practices with public authorities.

Regulators would also examine how their rules treat tokenized assets. According to the report, the SEC, CFTC, FCA, and Bank of England will consider common approaches to settlement finality, regulatory treatment, and market infrastructure.

One area under review is whether stablecoins and tokenized money-market funds could qualify as margin collateral at central counterparties. Any decision would depend on separate work by the relevant agencies because the task force cannot authorize new collateral or change existing market rules.

Tokenized securities have already entered active regulatory discussions in both countries. In July, the UK selected HSBC's Orion platform for its first blockchain-based sovereign bond, with the digital gilt scheduled for issuance by early 2027 inside the Bank of England and FCA Digital Securities Sandbox.

U.S. regulators are examining similar questions involving ownership records and investor rights. The SEC delayed work on a tokenized-stock exemption in May after exchanges raised concerns about unaffiliated companies issuing blockchain representations of public shares, according to earlier crypto.news coverage.

Hepworth said suppressing digital-asset technology could leave either country behind jurisdictions that allow regulated development. In his assessment, the task force represents an effort to adapt financial oversight while preserving the competitive positions of London and New York.

"Both countries also recognize that simply trying to ban or suppress this technology risks putting them at a competitive disadvantage to jurisdictions that embrace it," he said. "This task force is an attempt to work out how regulation can adapt to that reality."

Stablecoin access depends on domestic implementation

Published alongside the recommendations, the UK-US Joint Statement on Stablecoins supports a route through which a stablecoin regulated in one country could eventually be offered or used in the other.

Officials said any arrangement should preserve financial stability, consumer protection, market integrity, and safeguards against illicit finance. The statement also supports one-to-one reserve backing and protection for holders if an issuer becomes insolvent.

No mutual-access system currently exists under the announcement. Regulators must decide how an overseas stablecoin issuer would qualify, which domestic requirements would still apply, and how authorities would divide supervisory duties.

Hepworth noted that the countries are coordinating on stablecoins, tokenized securities, and cross-border access so their regulatory systems can remain effective as the technology develops. He cautioned, however, that cooperation documents do not themselves change the legal position of issuers, exchanges, or investors.

"Importantly, none of the ten recommendations published in July creates binding rules by itself. They establish regulatory priorities and areas for cooperation, while the actual rules will still be made domestically."

The absence of binding provisions means the recommendations do not grant licenses, establish passporting rights, or remove compliance duties in either jurisdiction. Companies seeking access to U.S. or UK customers must continue to follow the laws and authorization requirements that apply in each market.

U.S. rules remain unfinished under the GENIUS Act

For American issuers and investors, implementation depends partly on the GENIUS Act, which President Donald Trump signed in July 2025. The statute created a federal framework for payment stablecoins, including one-to-one reserve requirements, issuer restrictions, monthly disclosures, and federal or qualifying state supervision.

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

Federal agencies did not complete all required regulations by the law's July 18, 2026, deadline. As reported in July, several rule packages remained unfinished, including customer identification and anti-money-laundering measures.

Missing the deadline did not automatically postpone the statute's implementation. The GENIUS Act is scheduled to take effect by Jan. 18, 2027, unless final regulations produce an earlier effective date under its timetable.

The task force also asked the two countries to support a targeted review of the Basel Committee on Banking Supervision's prudential standards for crypto assets. According to the report, U.S. and UK officials will seek standards that are technology-neutral, based on evidence, and consistent across financial centers.

UK stablecoin rules are moving on a separate timetable

British regulators are proceeding through a different framework. The FCA will oversee most UK stablecoin issuers and regulated crypto activities, while the Bank of England will supervise sterling stablecoins that HM Treasury recognizes as systemically important.

In June, the Bank dropped proposed individual holding caps and proposed a £40 billion issuance limit for each systemic stablecoin. Its framework would permit issuers to hold up to 70% of reserves in short-term government debt, with the remainder kept in non-interest-bearing deposits at the central bank.

The Bank is accepting comments on its draft code through Sept. 22 and intends to finalize the requirements by the end of 2026. Regulated systemic stablecoins are expected to begin operating under the framework in 2027.

Hepworth said onchain markets will keep developing while officials build the applicable rules. Regulators, he added, must balance international competition with the financial oversight governments have traditionally exercised through banks.

The FCA's authorization window for firms entering the new UK crypto regime will run from Sept. 30, 2026, to Feb. 28, 2027. Approved rules will apply when the mandatory framework begins on Oct. 25, 2027.
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