CP25/14: Chapter 3 summary and commentary.

Below we have set out a summary of the sections and paragraphs of Chapter 3 of the FCA’s CP25/14.

Chapter 3 of CP25/14 establishes a comprehensive regulatory framework for Qualifying Stablecoin issuers. It imposes significant additional regulatory burden compared to functionally equivalent payment instruments and our main concern is that the proposals create a two-tier regulatory system in which stablecoins face substantially more stringent requirements than traditional payment methods, despite serving similar economic functions.

Below we look at the key sections of Chapter 3, setting out a summary and then a commentary which looks at the proposals for stablecoins and the requirements in place for other, similar asset classes.

Our summary of the problems and suggestions for improvements are set out in the final sections.

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