The Financial Conduct Authority has chosen four companies totrial stablecoin services under proposed regulations. The initiative is part ofthe FCA’s Regulatory Sandbox, which allows firms to test products in real-worldconditions with safeguards.The sandbox follows the FCA’s broader work on cryptoregulation. Last month, itopened a consultation on final rules for cryptoasset firms, with responsesaccepted until 12 March 2026.FCA Begins Testing Stablecoin Issuance ProgramThe FCA received 20 applications and selected MoneeFinancial Technologies, ReStabilise, Revolut, and VVTX. Testing will focus onstablecoin issuance. The proposals cover different use cases, includingpayments, wholesale settlement, and crypto trading.Matthew Long, director of payments and digital assets at theFCA, said the regulator is “supporting UK stablecoin issuers to ensure they canbe trusted for payments, settlement and trading,” adding that the work will“benefit consumers and financial transactions” and contribute to the FCA’sstrategy and the Government’s National Payments Vision.Stablecoin Testing Part of Regulatory ReviewFirms in the sandbox will receive feedback from FCAspecialists. The findings will inform the UK’s stablecoin rules, expected to befinalised later in 2026. Testing is scheduled to begin in the first quarter of2026.The FCA described the sandbox as part of a broader effort toenable innovation in UK financial services. It complements initiatives such asthe Digital Securities Sandbox.Sandbox Firms Must Obtain Full AuthorisationAll firms in the sandbox will need to be authorised underthe new crypto regime once it launches in October 2027. The application gatewayopens in September 2026.The FCA has previously consulted on multiple aspects ofcrypto regulation, including stablecoin issuance, cryptoasset custody,prudential rules, conduct of business, and market abuse. The consultations arenow largely complete, and policy statements are expected this summer.This article was written by Tareq Sikder at www.financemagnates.com.