The United States and the United Kingdom want to reduce differences in rules for stablecoins and tokenized assets. The joint approach aims to facilitate cross-border payments, support blockchain use in traditional financial markets, and prevent divergent regulation from hampering competition between the world’s two largest financial centers.
The U.S. Department of the Treasury and UK HM Treasury have published recommendations from the Transatlantic Taskforce on Future Markets. The initiative was established in September 2025 and aims to deepen cooperation between the United States and the United Kingdom in capital markets, digital assets, and new financial infrastructure. According to both governments, the proposed steps should reduce unnecessary barriers to cross-border business and create more open conditions for innovation.
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Tokenized assets to undergo practical testing
Tokenization refers to the conversion of ownership rights to a particular asset, such as a bond, fund share, or other investment, into the form of a digital token maintained on a blockchain or similar distributed database. It does not necessarily mean the creation of a new cryptocurrency. Rather, it is a technological change in the way traditional financial assets are issued, transferred, and settled.
The digital section of the joint document contains five recommendations. Four main areas focus on practical testing of tokenization, convergence of regulatory approaches, stablecoin rules, and the coexistence of different forms of digital money. The fifth recommendation concerns international rules under which banks assess risks associated with cryptocurrencies and other digital assets.
The first step will be to engage a private sector-led group that will test cross-border use of tokenized assets for one year and share best practices. Firms and authorities are to address, for example, what legal certainty is necessary for specific transactions and which technical standards could enable British and American systems to actually communicate with each other.
Key regulatory institutions are also to seek a common approach. On the British side, this will primarily involve the Bank of England and the Financial Conduct Authority, while on the American side it will involve the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Regulators are to examine, for example, the moment when a trade in tokenized securities is legally considered definitively settled. They are also to assess the possibility of using stablecoins or tokenized money market funds as collateral with central counterparties, which stand between participants in financial trades and help reduce the risk of their default.
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US and UK want to create cross-border stablecoin market
A separate section of the agreement addresses stablecoins, digital tokens whose value is meant to be pegged to, for example, the US dollar or British pound. Unlike bitcoin, their price should therefore not fluctuate significantly. Stablecoins are currently used primarily in cryptocurrency trading, but are increasingly gaining traction in payments, international transfers, and settlement of financial transactions.
Both countries want to support a “dynamic cross-border stablecoin market” and gradually align their regulatory rules. The goal is not to introduce completely identical laws, but to achieve comparable outcomes where risks and activities are also comparable.
According to the joint statement, governments want to protect financial stability, but at the same time do not want to create rules that would distort the market or discourage companies from operating across borders. Well-regulated stablecoins can, they say, increase competition, modernize financial infrastructure, and accelerate international payments.
Stablecoins considered money should be fully backed by high-quality and easily sellable assets, at a minimum ratio of one to one. Thus, for every digital dollar issued, the issuer should hold a corresponding value of safe reserves.
Reserves should be separate from the issuer’s own assets and protected in favor of token holders. At the same time, they should have the ability to redeem the stablecoin in a timely manner and know in advance what legal rights its holding provides them.
The UK and the United States simultaneously support the use of regulated stablecoins in payments, trade settlement, and on tokenized financial markets. Providers of legal and regulated services should, according to the agreement, have fair access to bank accounts and other financial infrastructure, naturally while maintaining appropriate security measures.
US GENIUS Act awaiting completion of rules
The new transatlantic recommendation builds on the US GENIUS Act, which President Donald Trump signed in July 2025. It is the first comprehensive federal framework in the United States focused directly on payment stablecoins. The law establishes, among other things, rules for reserves, oversight of issuers, combating money laundering, and compliance with sanctions.
The GENIUS Act also requires stablecoin backing of at least one to one. Permitted reserves may include cash, bank deposits, short-term US government bonds, selected repo operations, or money market funds investing in similar safe assets.
However, US authorities are still completing implementing regulations. The law will take effect no later than January 18, 2027, or earlier if 120 days have elapsed since the issuance of final rules by the relevant federal regulators. The Treasury Department already published initial proposals in 2026 concerning state regulatory regimes, money laundering, and sanctions obligations of issuers.
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Tokenization could bring UK tens of billions
The transatlantic agreement comes shortly after the publication of a report by the UK Digital Wholesale Markets Taskforce. According to analysis by Barclays and PwC, the expansion of tokenization could increase the annual economic output of the UK financial sector by up to £33 billion by 2035, approximately $44 billion. An additional £14 billion annually could come from higher tax revenues.
However, such a scenario assumes several conditions. The UK would have to rank among the world’s leading tokenization centers, the technology would have to gain acceptance globally, and the domestic British market would have to adopt it at a similar pace to other major economies.
The main benefit of tokenization should be faster trade settlement, simpler movement of collateral between institutions, and reduction of manual processes. Digital ownership records can also reduce the number of failed transactions and free up capital that financial institutions currently hold as reserves due to slower and fragmented systems.
Britain wants to issue tokenized government bond
The report calls on the UK government to conduct a pilot issuance of a digital government bond designated as DIGIT by the first quarter of 2027 at the latest. The bond would be issued using distributed ledger technology within the controlled environment of the UK Digital Securities Sandbox. The UK could thus become the first G7 country to tokenize its government debt.
The taskforce also wants to test an entire repo transaction on blockchain. Repo operations are used by banks and other institutions for short-term financing secured by, for example, government bonds. The test is not meant to verify just the token transfer itself, but the entire process from closing the trade to its settlement, including compatibility of different systems and cross-border use.
For the average user, the changes will probably not manifest immediately. In the long term, however, they may affect the speed and cost of foreign payments, the range of digital financial products, and the way banks, exchanges, and investment funds transfer money and securities. The US-UK agreement primarily shows that stablecoins and tokenization are gradually moving from the experimental part of the cryptocurrency market into the very infrastructure of global finance.
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