Revolut Begins UK Testing of Pound-Pegged Stablecoin
Revolut is testing a pound-pegged stablecoin in a UK regulator sandbox starting this quarter. The trial explores uses for payments and wholesale settlements.
The fintech firm Revolut is set to begin testing a cryptocurrency token pegged to the British pound as part of a regulatory trial in the United Kingdom[Country:{ "assets":{ "country":"GB" } }]. The Financial Conduct Authority (FCA) announced on Wednesday that the trial will be conducted within its sandbox program, which provides a controlled environment for firms to test stablecoin products.
The initiative includes Revolut alongside three smaller firms: Monee Financial Technologies, ReStabilise, and VVTX. Major high-street lenders are not participating in this specific trial. The project will investigate potential use cases such as wholesale settlement, crypto trading, and payments.
Financial institutions in Britain have generally maintained a more cautious stance toward stablecoins compared to their counterparts in the United States[Country:{ "assets":{ "country":"US" } }] and other European regions. This approach is partly attributed to the perspective of the Bank of England (BoE).
Andrew Bailey, the Governor of the Bank of England, has expressed a preference for banks to focus on tokenised, or blockchain-based, deposits instead.
Revolut, currently Europe's most valuable fintech company, plans to start its testing work this quarter. While the firm obtained a restricted UK banking license in 2024, it is still in the process of securing a full license. Sources familiar with the project noted that the work will center on the issuance of a stablecoin denominated in pounds.
The global market for stablecoins has expanded rapidly, with El Salvador[Country:{ "assets":{ "country":"SV" } }]-based Tether leading the sector with over $180 billion in circulation. However, European-denominated tokens remain a small segment. According to the AFME, stablecoins based on the euro, British pound, and the franc of Switzerland[Country:{ "assets":{ "country":"CH" } }] represent less than 0.2% of the global market.
In 2023, the Bank of England advised banks that any stablecoin issuance should be conducted under separate branding. This policy aims to prevent confusion between the regulatory protections offered for traditional bank deposits and those applicable to stablecoins.
