Earlier this month, I spent two days at the FCA's Stablecoin Policy Sprint alongside part of the Velocity team. It was a working session that brought together banks, neo-banks, crypto firms, and payments companies to workshop how the UK can safely support stablecoin adoption for retail payments and remittances. At Velocity, stablecoin infrastructure is core to what we're building for and who we're building with, and being in that room only reinforced what we're already seeing from the ground up: this market is moving, and the infrastructure question is no longer hypothetical.
The format was more hands-on than I expected. Eight working groups, two days, and Day 1 started with a deceptively simple ask: pick a business model and build it out from scratch. There's something clarifying about being forced to make foundational choices in real time with a room full of people who all have different answers. My group chose the full-sandwich model, mapping out a GBP payment leaving the UK and landing in an end-user's BRL account in Brazil, and tracing that end-to-end with people from across the value chain in the same room brought out tensions and perspectives that rarely surface when everyone at the table is on the same side of the transaction.
Here's what stood out.
The Debate Has Moved On
What struck me most wasn't any single recommendation, it was the baseline assumption everyone walked in with. Stablecoins as a payment infrastructure are no longer a hypothesis to be tested. The conversation has shifted entirely to sequencing and speed.
One payments firm made this tangible when they noted that their AI company customers can now distribute payments globally from day one. That is a different corner of the market to where Velocity operates, but it points to the same underlying reality: stablecoins are already functioning as commercial infrastructure across the board, for the smallest new businesses and the largest incumbents alike.
The mix of participants mattered too. This wasn't a crypto echo chamber. Established banks sat alongside neo-banks and payments firms, and the consensus across all of them was consistent: regulatory ambiguity is the primary blocker. Nobody wants to commit capital and build operational muscle in a grey zone.
The Core Problem: Stablecoins Aren't Legally Money
If there was one structural issue that cut across every group's recommendations, it was this: in the UK, stablecoins are classified as crypto assets where it counts, not money. That classification has downstream consequences for tax treatment, accounting, bank balance sheets, and collateral eligibility. Until it changes, stablecoins cannot truly function as a payment instrument regardless of what the technology can do.
My group's recommendation was direct: create a class of regulated stablecoins that are legally recognised as having the characteristics of money. Critically, this shouldn't be a purely domestic framework. The UK should lead on mutual recognition principles so that well-regulated overseas stablecoins qualify too. Building a framework designed only for domestically-issued stablecoins would be building for the wrong future. This market will have more than one winner, and the UK's framework needs to reflect that from the start.
What the Room Was Debating
Beyond the classification question, several other themes came up that are worth exploring for anyone building or buying in this space:Regulatory grey areas are causing corporate paralysis. Multiple groups independently recommended the FCA issue a "Dear CEO" letter to remove ambiguity that is making corporates cautious about adoption. The issue isn't opposition. It's that legal and compliance teams can't sign off on something that isn't clearly in bounds.
The tension between transparency and sensitivity on public chains is still unresolved. Transaction immutability sits uncomfortably alongside data protection obligations, and the question of what should be public, what should be private, and how you design for both at once doesn't have a clean answer yet. It's a live consideration for any UK-regulated firm building on public infrastructure.
The Travel Rule is a starting point, not a destination. There was real appetite in the room to explore how compliance information passed alongside blockchain transactions could be enriched beyond what the Travel Rule currently requires. As transaction volumes scale, interoperability on this will matter more, not less. London's FX position is in play. The rules governing FX-to-stablecoin transitions are still being worked through, and getting them right is critical. London's status as a global FX hub doesn't carry over automatically into a stablecoin payments world. It has to be designed in.
What Happens Next
The FCA will use the sprint input to inform their stablecoin policy approach. There's no formal output yet and no committed timeline, but the quality of the conversation and the seriousness of the participants suggested this will translate into something concrete. If you're working through any of these questions, whether on the policy, product, or infrastructure side, we'd love to compare notes. This is very much an ongoing conversation for us at Velocity.
