The UK Financial Conduct Authority (FCA) has unveiled a new stablecoin project group as part of its regulatory sandbox initiative, offering applications until January 18, 2026. This announcement follows reports from ChainCatcher and Bloomberg regarding the FCA’s role in fostering innovation within the stablecoin space. David Geale, from the FCA, revealed that a major enterprise has been chosen to test a pound sterling stablecoin for payment purposes within the sandbox. Participants must ensure their projects adhere to the requirements outlined in the FCA’s consultation paper published in May. Furthermore, the UK government is exploring expanding the UK government bond market, potentially leveraging stablecoins to manage reserves. This move reflects the UK’s dual-track approach to regulating stablecoins: the Bank of England handles systemically important stablecoins for stability and financial resilience, while the FCA oversees other stablecoins for consumer protection and conduct.