US-UK Crypto Agreement Steers Future Direction, But Lacks Binding Regulations

The United States and the United Kingdom have unveiled 10 recommendations concerning stablecoins, tokenized securities, and cross-border finance. However, these suggestions do not create enforceable regulations.

The Transatlantic Taskforce for Markets of the Future revealed these recommendations on July 14, emphasizing cooperative priorities for two of the world’s largest financial hubs without modifying either country’s regulatory framework.

Established in September 2025 by U.S. Treasury Secretary Scott Bessent and UK Chancellor Rachel Reeves, this task force brought together officials from various agencies, including the Treasury, Federal Reserve, SEC, CFTC, Bank of England, and FCA.

Five recommendations focus on digital assets, while the remaining five cover areas like capital raising, foreign issuer requirements, consolidated market data, swap-trading oversight, and international accounting standards.

Frank Hepworth, CEO of New Market Trading, highlighted that this collaboration seeks to address the inherent conflict between global digital markets and national financial regulations, as crypto assets can be transferred globally via digital devices, while financial laws are predominantly enforced within national borders.

“The US and UK are initiating this process because they are key financial markets contending with the same challenge: digital assets are accessible globally through any device, yet financial regulation remains confined to national boundaries, primarily enforced via domestic institutions,” Hepworth explained.

US-UK Crypto Collaboration Focuses on Tokenized Markets

The first recommendation suggests creating a private-sector-led group for tokenized finance to operate for one year, testing cross-border transactions while sharing technical and regulatory practices with public authorities.

Regulators will evaluate how existing rules apply to tokenized assets. The SEC, CFTC, FCA, and Bank of England are expected to consider coordinated approaches concerning settlement finality, regulatory treatment, and market infrastructure.

One consideration is whether stablecoins and tokenized money-market funds can be accepted as margin collateral at central counterparties. Any conclusions will depend on evaluations by relevant agencies, as the task force lacks the authority to alter existing collateral requirements or market rules.

Ongoing regulatory discussions regarding tokenized securities are in progress in both countries. In July, the UK selected HSBC’s Orion platform for its inaugural blockchain-based sovereign bond, with issuance anticipated by early 2027 within the Bank of England and FCA Digital Securities Sandbox.

U.S. regulators are also examining similar topics concerning ownership records and investors’ rights. The SEC delayed work on a tokenized-stock exemption in May following concerns from exchanges about independent companies issuing blockchain representations of public shares, as previously reported.

Hepworth warned that hindering digital asset technology could leave either nation trailing behind jurisdictions that embrace regulated innovation. He believes the task force symbolizes an effort to modernize financial oversight while maintaining the competitive advantages of London and New York.

“Both countries recognize that outright bans or suppression of this technology could jeopardize their competitive standing against jurisdictions that promote it,” he asserted. “This task force aims to explore how regulation can adapt to this evolving landscape.”

Stablecoin Access Hinges on Domestic Implementation

Alongside the recommendations, the UK-US Joint Statement on Stablecoins proposes a framework where a stablecoin regulated in one nation could eventually be utilized in the other.

Officials emphasized that any framework must prioritize financial stability, consumer protection, market integrity, and measures to counter illicit finance. The statement also promotes one-to-one reserve backing and safeguards for holders in case of an issuer’s insolvency.

No mutual-access system currently exists as part of this announcement. Regulators must decide how an international stablecoin issuer would qualify, which domestic compliance obligations would remain in effect, and how supervisory duties would be divided.

Hepworth remarked that the two nations are aligning efforts regarding stablecoins, tokenized securities, and cross-border accessibility to ensure their regulatory frameworks stay effective as technology evolves. However, he cautioned that collaborative documents do not modify the legal positions of issuers, exchanges, or investors.

“Importantly, none of the ten recommendations released in July create binding rules on their own. They outline regulatory priorities and areas for cooperation, while actual regulations will still be determined on a domestic level.”

The absence of binding provisions indicates that the recommendations do not grant licenses, create passporting rights, or waive compliance requirements in either jurisdiction. Companies seeking to access U.S. or UK consumers must adhere to the existing laws and authorization protocols in each market.

U.S. Regulations Remain Incomplete Under the GENIUS Act

For American issuers and investors, implementation is partially contingent on the GENIUS Act, which was signed into law by President Donald Trump in July 2025. This legislation set up a federal framework for payment stablecoins that includes one-to-one reserve mandates, issuer limitations, monthly reporting, and federal or qualifying state oversight.

The Treasury has proposed regulations for state-level regulatory frameworks and distinct anti-money laundering and sanctions compliance obligations. Issuers with tokens totaling up to $10 billion may depend on state oversight if the Treasury determines that the state system significantly aligns with federal guidelines.

Federal agencies did not finalize all necessary regulations by the July 18, 2026, deadline. As noted in July, several regulatory initiatives are still ongoing, including those pertaining to customer identification and anti-money laundering practices.

Failing to meet this deadline did not automatically postpone the statute’s implementation. The GENIUS Act is set to take effect by January 18, 2027, unless final regulations allow for an earlier effective date within its timeline.

The task force also encouraged both nations to support a focused review of the Basel Committee on Banking Supervision’s prudential standards for crypto assets. The report indicates that U.S. and UK officials will advocate for standards that are technology-neutral, evidence-based, and uniform across financial centers.

UK Stablecoin Regulations Follow a Separate Path

British regulators are progressing through a distinct framework. The FCA will supervise most UK stablecoin issuers and regulated cryptocurrency activities, while the Bank of England will monitor sterling stablecoins deemed systemically important by HM Treasury.

In June, the Bank retracted individual holding cap proposals and introduced a £40 billion issuance limit for each systemic stablecoin. Its framework permits issuers to maintain up to 70% of reserves in short-term government debt, with the remainder held in non-interest-bearing deposits at the central bank.

The Bank is currently seeking feedback on its draft code until September 22 and aims to finalize the requirements by the end of 2026. Regulated systemic stablecoins are expected to begin operations under this framework in 2027.

Hepworth indicated that on-chain markets will continue to transform even as officials formulate the relevant regulations. He stressed that regulators must strike a balance between international competitiveness and the financial oversight traditionally exercised through banks.

The FCA’s authorization period for businesses entering the new UK cryptocurrency regime will extend from September 30, 2026, to February 28, 2027. Approved regulations will be enacted when the mandatory framework begins on October 25, 2027.