Feedzai: Crypto Cannot Scale as a Bank’s Side Project

The FCA‘s final cryptoasset rules halve the capital charge that applies to stablecoin issuance. is this a signal the regulator wants volume to build, and argues the harder question for a bank is not whether stablecoins become a payment rail but whether it can carry that volume on the risk infrastructure it already runs.

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.

1. The FCA has halved the stablecoin capital charge in its final crypto rules. What does that signal about how the regulator now sees crypto banking?

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.