Dan Holmes of Feedzai on the FCA’s halved stablecoin capital charge, and why banks that run crypto on a separate stack will end up carrying the risk.

Feedzai works in financial risk management and fraud prevention. The Fintech Times put five written questions to Holmes on what the rules change, what trust on a crypto rail actually requires, and how fraud risk shifts once a settled transfer cannot be recalled.

It signals that stablecoins are no longer being treated as a fringe asset class. They’re being pushed towards being regulated as day-to-day money, forming the conversation about what currency looks like over the next decade.

The capital coefficient is important because it scaled with issuance. At 2 per cent, growth carried a rising cost. Halving it to 1 per cent lowers the cost and entry, and puts the UK in a competitive position relative to its global peers.

More broadly this is calibrated for acceleration as it signals the FCA wants volume to build. So the question for banks isn’t whether stablecoins become a meaningful payment rail. It’s whether they can handle that volume through the same risk infrastructure they already run, or whether they end up building something separate to cope with it. The firms treating this as another payment type will absorb the growth whereas the ones treating it as a side project will carry the long term risk as data and therefore decisions become disconnected.

Trust here is about whether the controls consumers already take for granted on current rails exist on the new ones.

Source link