Revolut Begins UK Pound Stablecoin Testing in FCA Sandbox

Britain’s Revolut will begin testing a cryptocurrency token pegged to the British pound as part of the Financial Conduct Authority’s regulatory sandbox, the regulator announced Wednesday. The trial involves three smaller firms—Monee Financial Technologies, ReStabilise, and VVTX—but excludes major high-street lenders.

The sandbox allows fintechs to experiment with stablecoins under controlled regulatory oversight. Revolut, London-based and Europe’s most valuable fintech firm, said testing would begin “this quarter” and focus on the issuance and functionality of a pound-denominated stablecoin.

This move follows Revolut’s recent expansion into the United Arab Emirates, where it secured in-principle approval from the Central Bank of the UAE to operate retail payment and stored-value services. This demonstrates Revolut’s global growth strategy and regulatory agility, which it is now applying in the UK through controlled experimentation with blockchain-based payments.

Exploring Use Cases for Stablecoins

The pilot will evaluate potential applications including payments, wholesale settlement, and crypto trading. While stablecoins have primarily been adopted in trading markets, some banks and fintechs see them as a way to improve efficiency in mainstream financial services.

The Bank of England has historically been cautious about stablecoins, with Governor Andrew Bailey emphasizing tokenized or blockchain-based deposits as a priority over commercially issued stablecoins. Regulators have also advised banks issuing stablecoins to separate branding from traditional deposits to avoid confusion over consumer protections.

Market Context

Stablecoin volumes have surged globally, led by Tether, which reports more than $180 billion in U.S. dollar-pegged tokens circulating. Despite this growth, European stablecoins—including those pegged to the euro, pound, and Swiss franc—currently represent less than 0.2% of the global market, according to the Association for Financial Markets in Europe (AFME).

Revolut’s entry into pound-backed stablecoins positions the UK fintech sector to explore blockchain-based innovations while operating within established regulatory guardrails, potentially paving the way for broader adoption of stablecoins in mainstream financial services.