Stablecoins Shift Into Regulated Finance in U.S. and U.K.

Stablecoins are moving from being a crypto niche into the heart of regulated finance. In both the United States and the United Kingdom, new rules are shaping how these digital-pegged dollars and pounds can operate.  Together, these shifts show that stablecoins are becoming part of mainstream money.

U.S. Issuers Push Toward Banking Status

In the U.S., stablecoin issuers are making an effort to operate like banks. Like Circle, Ripple has applied to create Ripple National Trust Bank, a federal trust that would hold customer assets under strict regulatory oversight. This setup means stablecoin issuers must follow audits, duties, and rules for keeping reserves in cash or short-term Treasuries. 

However,  the bigger goal is to gain direct access to the Federal Reserve. This would let any issuer hold reserves safely at the central bank and earn interest without relying on commercial banks. More importantly, reserves at the Fed offer unmatched stability and instant liquidity. Still, gaining account access at this level is not guaranteed. 

Against this backdrop, Tether has launched a U.S.-based stablecoin, USAT. Unlike its flagship USDT, which remains dominantly offshore, the new USAT will operate under American rules with U.S. custodians. Analysts expect the new digital asset to capture 5–10% of the U.S. market by late 2026. With faster onboarding, adoption could rise to 10–20%. 

By splitting products into offshore and onshore, Tether is reducing the regulatory risk while competing directly with licensed U.S. rivals. 

U.K. Puts Tight Caps on Stablecoins

While U.S. issuers chase banking charters, the Bank of England is setting strict limits. It has proposed strict limits on stablecoin holdings. Personal wallets may only hold between £10,000 and £20,000, while business wallets are capped at £10 million.

The bank has set redemption requirements to be same-day or next-day, pushing issuers to hold very short-term assets. This model makes U.K. stablecoins behave more like e-money programs or narrow banks. They are safe and fast, but not built to hold large amounts of money.

Tokenized Funds Bring Cash On-Chain

This approach also affects financial markets. Large GBP balances cannot sit on-chain, limiting U.K.-based decentralized finance (DeFi) liquidity. Instead, users and firms will cycle GBP stablecoins quickly through payment rails before converting to USD, EUR, or tokenized funds for longer-term use.

Here, partnerships like the one between DBS, Franklin Templeton, and Ripple become important. Launching the tokenized money market funds would let exchanges and payment firms keep cash-like assets, including stablecoins, on the blockchain. 

The U.S. and U.K. are moving in different directions, but both show the same trend that stablecoins are being shaped into regulated financial products.