British fintech giant Revolut is preparing to test a pound-denominated stablecoin in the United Kingdom, marking a cautious but notable step in the country’s approach to digital assets.
The trial will take place under the Financial Conduct Authority’s regulatory “sandbox”, a controlled environment that allows firms to experiment with new financial products without exposing the wider system to undue risk. According to the Financial Conduct Authority, the pilot will involve Revolut alongside three smaller firms — Monee Financial Technologies, ReStabilise and VVTX — but no major high-street banks.
Stablecoins are cryptocurrencies designed to hold a steady value by being pegged to traditional currencies such as the pound or the dollar. While they have become a cornerstone of crypto trading globally, Britain’s largest financial institutions have so far taken a more conservative stance than peers in Europe and the United States.
That caution partly reflects concerns at the Bank of England, which has repeatedly warned about the risks of privately issued digital money. Governor Andrew Bailey has said banks should prioritise “tokenised” deposits — traditional bank money represented on blockchain systems — rather than standalone stablecoins.
Revolut said work on the trial will begin this quarter, focusing on the issuance of a token pegged to the British pound. The sandbox tests will explore potential use cases including payments, wholesale settlement and crypto trading.
Founded in London, Revolut has expanded rapidly and is now Europe’s most valuable fintech. Although it secured a UK banking licence with restrictions in 2024, it is still awaiting full authorisation.
The pilot comes as activity in the global stablecoin market continues to surge. Volumes are dominated by **Tether**, which says more than $180 billion of its dollar-linked tokens are in circulation. By contrast, European stablecoins — including those tied to the euro, pound and Swiss franc — account for less than 0.2% of the global market, according to the Association for Financial Markets in Europe.
While stablecoins remain primarily a tool for crypto traders, banks and regulators are increasingly debating whether they could also streamline mainstream financial services. The Bank of England has previously advised that any banks issuing stablecoins should do so under separate branding, to clearly distinguish them from protected customer deposits. Photo by Boubloub, Wikimedia commons.