[UK Financial Institutions: Stablecoin Regulation and Payment Integration to Become Core Topics by 2026] UK financial institutions have reviewed the progress of crypto regulation in 2025 and outlined policy directions for 2026. UK Finance pointed out that the UK is shifting its regulatory focus from unbacked crypto assets to stablecoins backed by real-world assets, viewing stablecoins as payment and monetary tools rather than investment assets. This will impact redemption timelines, KYC requirements, and compliance costs for issuers. UK Finance warned that if the regulatory burden on GBP stablecoins is higher than that on non-GBP stablecoins issued overseas, it could lead to issuers relocating abroad, weakening the UK's control over stablecoins and monetary policy. Core challenges for 2026 include systemic stablecoin redemption rules, multi-currency design, and integration with payment scenarios. The UK Financial Conduct Authority has already launched a regulatory sandbox for non-systemic stablecoins, and the implementation of these policies will influence London's status as an international financial center.