One of the last bastions of anti-crypto asset management is about to fall. On Monday, Vanguard posted a job for a Head of Digital Assets. The first in its history.

While its peers, BlackRock, Fidelity, Invesco, JPMorgan AM, State Street, spent the last three years issuing crypto ETPs and launching tokenized funds, Vanguard did the opposite. It stayed out.

The official reasoning, still posted on its site, is a preference for products that “generate cash flow in a transparent way, such as interest payments and dividends.”

The new job posting still doesn’t mention crypto once. What it does mention is tokenization, stablecoins, custody, and blockchain-based settlement. The mandate is to define the firm’s digital assets strategy, build a multi-year roadmap, and develop “client-facing digital asset capabilities.”

It’s not a full 180, and it didn’t come from nowhere. In December, Vanguard already began allowing clients to trade third-party crypto ETFs on its brokerage platform. And for two years now it has had a CEO, Salim Ramji, whose last job was running BlackRock’s iShares, where he oversaw the launch of IBIT, the iShares Bitcoin Trust.

And while Ramji might still feel comfortable watching his peers’ crypto ships sail off without him, he seems rightfully far less relaxed about missing a tech upgrade to the funds Vanguard already sells.

In today’s Briefing:

  • UBS completes its first stablecoin payment

  • FCA finalizes crypto rules

HIGH SIGNAL NEWS

  • The European Investment Bank issues the first DLT-native commercial paper on Clearstream's D7 platform. DekaBank, DZ BANK, and Union Investment participated in the transaction as primary investors in this euro-denominated commercial paper distributed into the international market. Also known as the Eurobond market, it represents more than €14.6 trillion in outstanding securities, with around 12,000 issuers across more than 130 countries. 🌐

  • UBS announces it has completed its first worldwide stablecoin payment. The proof of concept was conducted with Merge, a stablecoin payment provider. “The results confirm the potential for more direct, near real-time cross-border payments and greater efficiencies for corporate treasuries,” explained Andreas Kubli, Group Head of Digital Assets at UBS, in a statement. 🪙

  • Kraken is pursuing a full banking license in Europe. According to CoinDesk, the crypto exchange has reportedly chosen to pursue the process in Lithuania. If the firm obtains the license, Kraken would become the only crypto-native player to hold such a designation, while it is already authorised as a MiCA CASP and also holds a MiFID license. 🏦

  • ESMA launches supervisory review of CASPs’ operational resilience. Just a few days after MiCA entered into force, the European financial watchdog is launching a major supervisory exercise to assess the digital operational resilience of Crypto-Asset Service Providers, with a particular focus on custody services. The exercise will be conducted by national regulators from the second half of 2026 through the first half of 2027. 🇪🇺

  • The Cari network expands to more than 30 banks. The tokenized deposit banking consortium was formed in September 2025, bringing together U.S. regional banks. Its infrastructure is built on ZKsync's Prividium, a permissioned Ethereum Layer 2, with a production launch targeted for Q4 2026. All the details about its infrastructure in our article here. 🇺🇸

TOP STORY

UK FCA Finalizes Long-Awaited Crypto Rules

Final rulebook: Last week, the UK’s Financial Conduct Authority (FCA) published its final rules for regulating crypto-assets and stablecoins. The regime covers trading platforms, custody, and stablecoin issuance, while rules for systemic stablecoin issuers are still being finalized separately and will fall under Bank of England supervision. The full framework will take effect in October 2027.

  • Why it matters: Despite its status as a global financial centre, the UK remains one of the last major jurisdictions without a dedicated crypto-assets and stablecoins framework. Across the EU, MiCA is now in full force since July 1. The U.S. passed the GENIUS Act last summer, while the CLARITY Act is now before the Senate. Singapore and Hong Kong have operated dedicated crypto regimes for several years.

Regulatory groundwork: The UK was not idle in the meantime. As early as January 2020, it required firms offering crypto exchange or wallet custody services to register with the FCA and fall under its anti-money-laundering (AML) supervision. To date, the regulator has received 408 applications and registered 67 firms, including Revolut as well as Coinbase and Kraken.

  • “That registration regime is very similar to what happened in Europe with the VASP framework, where local rules preceded MiCA. The regulatory framework now being introduced is much broader and is intended to bring crypto firms closer to the MiFID regime that applies to traditional financial instruments,” Diego Ballon Ossio, partner at Clifford Chance, told Blockstories.

Stricter requirements: The new rules raise the bar well beyond AML checks. Firms will have to hold capital buffers against losses on risky assets and run annual stress tests to show they can withstand market shocks. Custody is where the UK diverges most sharply from Europe. Client crypto-assets must be held in a statutory trust defined by stricter rules, with the assets controlled by the provider located in the UK.

Regulating trading venues: Custody is one area the rules settle cleanly. Trading venues are less straightforward. Unlike traditional markets, crypto order books are often global, and forcing exchanges to create separate UK order books would fragment liquidity. The UK therefore plans to let exchanges serve UK users through a locally regulated entity while still giving them access to a global order book.

The offshore challenge: That answer raises a supervision challenge, though. Under UK law, authorizing a branch can mean authorising the entire legal entity behind it, difficult when the exchange sits offshore and no global framework yet allows for effective cross-border supervision.

  • “Many crypto exchanges are established in jurisdictions such as the Seychelles or the Marshall Islands, but unlike in traditional finance, there are not yet the international supervisory arrangements needed to oversee them effectively. That makes approving those structures far more challenging, with no clear solution for now,” Ballon Ossio added.

The stablecoin retreat: The stablecoin side of the package moved in the softer direction throughout. Supervision splits between the FCA for non-systemic issuers and the Bank of England for systemic ones, and for the systemic tier the calibration eased on every line under industry pressure:

  • The share of reserves required to be held as unremunerated central-bank deposits was cut from 40% to 30%, leaving up to 70% in short-term UK government debt.

  • The proposed holding caps of £20,000 per individual and £10 million per business were dropped, replaced by a temporary £40 billion issuance ceiling per stablecoin.

  • The FCA halved the capital charge on issuance from 2% to 1%.

Outlook: The timeline is now fixed. The FCA will accept applications from September 2026 to February 2027, before the regime takes effect on 25 October 2027, while the Bank of England's stablecoin consultation runs until 22 September 2026, with final rules expected by year-end. The FCA and the Bank will also consult on the move to shared supervision.

Ben Regnard-Weinrabe is a partner at law firm Allen & Overy Shearman, where he focuses particularly on fintech, payments, and digital assets.

The UK is one of the last major jurisdictions to license stablecoins and crypto. Was that patience, or was it lost time?

Part of the answer is patience. The view was that the UK could afford to wait, watch the EU build MiCA and the U.S. debate its own approach, then design a regime that learned from others’ early choices and be more attractive. But patience does not explain the full delay. The first papers appeared in early 2023, while real momentum only returned around April 2025. That gap also reflects limited political will and a lingering wariness toward crypto.

What changed was competition. Once MiCA came into force and the U.S. advanced Genius, standing still became harder to justify. The FCA also has a statutory objective to support international competitiveness, which matters directly for stablecoins. If issuers hold reserves in dollar and euro money markets rather than in London, the UK risks losing the liquidity and activity that come with them.

The result is a genuinely detailed framework which firms can use to build competitive businesses. But the way it arrived has drawn criticism. The UK delivered its rules in fragmented pieces that industry has found hard to absorb, and has already amended regulations finalised only last year. The final perimeter guidance may not be published until September. MiCA took the opposite path, setting out the framework first and leaving the detail for later, so firms knew sooner what they were getting.

Rhys Bidder advises on regulation and strategy at Tokenised GBP, currently the largest GBP stablecoin with more than £30 million issued onchain.

As a GBP stablecoin issuer, what is your assessment of the FCA’s framework?

The FCA has landed in a good place, having listened to industry feedback: it is neither the lightest nor the most restrictive framework globally; it sits somewhere in the middle. For now, however, several important questions remain unresolved.

One of them concerns the threshold at which a stablecoin would be considered "systemic", as well as the transition model to get there. While the Bank of England and the FCA have outlined that transition, significant uncertainty remains over how it would work in practice, particularly the move to a regime requiring 30% of reserves to be held in cash at the central bank.

Another key question is the role regulated stablecoins will ultimately play in the UK's tokenized financial system. While the Bank of England and the FCA are actively promoting tokenization, they have yet to clearly establish stablecoins as the onchain cash leg for wholesale financial markets.

That matters because no other form of onchain money is ready today. The Bank's settlement infrastructure and tokenized deposit schemes remain years from large-scale deployment. For now, regulated stablecoins are the only onchain cash available to settle tokenized transactions in open markets.

  1. Ethereum Basics for Governments and Institutions (Ethereum Foundation) — This primer explains how Ethereum works, who governs it, and how it compares to other blockchains. It also offers practical guidance on how central banks should evaluate stablecoin issuance and settlement on Ethereum versus alternative networks, with examples of how governments and institutions are already using Ethereum today.

  2. Tokenization Can Change the World's Financial Architecture (IMF)— In this piece, the IMF highlights the potential benefits of faster settlement and programmable assets, while warning that policy choices will determine whether tokenized finance strengthens the financial system or creates new risks around fragmentation, liquidity, infrastructure, and oversight.

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Disclaimer: The information provided in the Institutional Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.

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