Regulator or innovator - who has the future of stablecoins?

The UK Financial Conduct Authority (FCA) proposed a reserve ratio of 85% for stablecoins, a move sparking strong industry opposition, fearing it could kill innovation and shift activity to more flexible jurisdictions such as Singapore and the EU. Critics believe the provision is too arbitrary and failing to distinguish between algorithmic stablecoins and fiat-backed stablecoins, which could damage London's fintech status. The FCA argued that the move was necessary for financial stability and consumer protection, noting that Terra's collapse highlighted the risks associated with it. Public consultation is expected in the coming months.