The FCA stablecoin sandbox was a dedicated cohort within the FCA's Regulatory Sandbox, open for applications from 26 November 2025 to 18 January 2026. Twenty firms applied and four were selected: Monee Financial Technologies, ReStabilise, Revolut and VVTX. Firms that missed the cohort can still apply to the Regulatory Sandbox, which accepts applications all year round, and must apply for authorisation to issue stablecoins once the new regime starts. This article explains how the sandbox works, how to apply now and how it connects to authorisation.
| Date | Milestone |
|---|---|
| 26 November 2025 | Stablecoin cohort opens |
| 18 January 2026 | Cohort applications close |
| 25 February 2026 | FCA names four selected firms; testing starts in Q1 2026 |
| June 2026 | FCA publishes final stablecoin rules (PS26/10) |
| 30 September 2026 to 28 February 2027 | Authorisation application window for the crypto regime |
| 25 October 2027 | New UK cryptoasset regime, including stablecoin issuance, takes effect |
What Is the FCA Regulatory Sandbox?
The FCA regulatory sandbox allows firms to test innovative products, services, business models or delivery mechanisms in a live environment with real customers, under FCA supervision and with appropriate consumer protections. Sandbox participants receive restricted authorisation or an Individual Guidance (IG) letter that permits testing within agreed parameters. The sandbox has operated since 2016 and is open to authorised and unauthorised firms of all sizes. Depending on the test, the FCA can offer restricted authorisation, individual guidance on how it reads its rules, waivers or modifications of rules, and no enforcement action letters. The stablecoin cohort was a targeted round within this programme.
Eligibility Criteria
The FCA assesses sandbox applications against its published eligibility criteria. In practice, firms must demonstrate:
Genuine innovation. The product or service must represent a genuine innovation in stablecoin issuance or stablecoin-based payments. The FCA is looking for business models that could not be adequately tested within the existing regulatory framework.
Consumer benefit. The innovation must have the potential to deliver benefits to consumers, the financial markets or the competitiveness of the UK financial services sector.
Readiness to test. The firm must be sufficiently developed to conduct a live test: with a working prototype, defined testing parameters and adequate resources to support the test period.
Need for sandbox support. The firm must demonstrate that the sandbox is necessary: that the regulatory uncertainty or complexity of the stablecoin framework means that testing outside the sandbox is not feasible.
The Application Process
- Pre-application engagement. Contact the FCA's Innovation team to discuss your proposition and assess suitability for the sandbox. This informal engagement helps refine the application.
- Formal application. Submit a detailed application covering your business model, the innovation, the proposed testing parameters, consumer protection measures, success criteria and exit strategy.
- FCA assessment. The FCA assesses the application against the eligibility criteria and engages in dialogue to refine the testing proposal.
- Sandbox entry. If accepted, the firm receives restricted authorisation with agreed testing parameters, reporting requirements and consumer protection conditions.
- Testing period. Tests run for a limited period agreed with the FCA, on a small scale and with a limited number of customers. The firm operates under FCA supervision, providing regular reports on testing outcomes, customer feedback and regulatory observations.
- Exit and next steps. At the end of the testing period, the firm and the FCA assess the results. Successful participants may proceed to a full authorisation application, informed by the sandbox experience.
What to Expect During the Sandbox
Sandbox participation is not a fast track to authorisation: it is a supervised testing environment. Firms should expect:
- Regular reporting requirements to the FCA
- Restrictions on the number of customers and transaction volumes during testing
- Consumer protection requirements including clear disclosures to customers about the testing nature of the service
- FCA scrutiny of reserve backing, redemption processes and operational resilience
- Dialogue with the FCA on regulatory implications and framework development
What Firms Should Do Now
The stablecoin cohort has closed, so firms now have two routes. First, apply to the Regulatory Sandbox, which is open all year, if you need to test a product before the regime starts. Second, prepare an authorisation application for issuing qualifying stablecoins. PS26/10 sets the final rules on backing assets and redemption, and PS26/12 sets a permanent minimum capital requirement of £350,000 for issuers. The FCA aims to decide applications made in the window from 30 September 2026 to 28 February 2027 before the regime starts on 25 October 2027. See our guide to UK cryptoasset authorisation. Firms planning to offer stablecoins in the EU need separate authorisation under MiCA: see EU MiCA authorisation.
Regulatory Counsel advises firms on FCA sandbox applications, stablecoin regulatory strategy and the pathway from sandbox to full authorisation. Contact us for a written proposal.
Frequently asked questions
No. Sandbox participation is a testing environment: it does not guarantee subsequent authorisation. However, successful participation provides valuable regulatory insight and can inform the authorisation application.
There is no fixed length. The FCA agrees the duration with each firm based on its readiness, whether it uses live customers and its business model.
Yes: sandbox participants can serve real customers, but within agreed parameters including customer number limits and transaction volume restrictions.
Participants must implement clear customer disclosures about the testing nature of the service, adequate reserve backing for any stablecoin issued, and redemption processes that protect customer funds.
The dedicated stablecoin cohort closed to applications on 18 January 2026. The FCA's Regulatory Sandbox remains open all year, so firms can still apply to test a stablecoin product.
Monee Financial Technologies, ReStabilise, Revolut and VVTX, selected from 20 applicants and announced on 25 February 2026.
From 25 October 2027, yes. Issuing a qualifying stablecoin from the UK becomes a regulated activity. The FCA's application window runs from 30 September 2026 to 28 February 2027, and issuers need minimum capital of £350,000.
Definitive guides on this topic
The permanent reference pages this article relates to.