Revolut to Pilot Pound Stablecoin in UK Regulatory Sandbox Trial

Revolut is set to begin testing a British pound pegged stablecoin as part of a regulatory sandbox trial overseen by the Financial Conduct Authority, marking one of the most significant moves yet by a major UK fintech into the digital token space.

The FCA confirmed that Revolut will participate in a controlled trial alongside three smaller firms, Monee Financial Technologies, ReStabilise and VVTX. The sandbox framework allows companies to test innovative financial products under close regulatory supervision before wider market rollout. No major high street banks are involved in this initial phase.

According to the regulator, the trial will explore potential use cases including retail and cross border payments, wholesale settlement between financial institutions and crypto asset trading. Revolut said work on the testing programme will begin this quarter, focusing on the issuance and operational mechanics of a pound denominated stablecoin.

Stablecoins are digital tokens designed to maintain a fixed value by being pegged to a traditional currency such as the British pound or US dollar. They are widely used in cryptocurrency markets as a way to move funds quickly without relying on conventional banking rails. Globally, volumes have expanded sharply in recent years, with dollar backed tokens dominating the market.

In contrast, European currency stablecoins including those linked to the pound, euro and Swiss franc account for a small fraction of global issuance. Industry bodies have estimated that such tokens represent less than one percent of worldwide stablecoin circulation, reflecting a more cautious regulatory and banking environment across Europe.

Britain’s larger financial institutions have so far taken a measured approach to stablecoins, partly influenced by the Bank of England’s stance. Governor Andrew Bailey has previously indicated that banks should prioritise tokenised deposits, which are blockchain based representations of traditional bank money, rather than issuing standalone stablecoins that could create confusion around consumer protections.

The Bank of England has also advised that if commercial banks do launch stablecoins, they should be clearly branded separately from insured deposits. This distinction is intended to avoid misunderstandings about the level of safeguarding and regulatory oversight attached to different forms of digital money.

Revolut, which received a UK banking licence with restrictions in 2024 and is awaiting full authorisation, has grown into Europe’s most valuable fintech group. The stablecoin trial could strengthen its position in digital payments and crypto services, areas that have contributed to its rapid expansion.

For the FCA, the sandbox initiative forms part of a broader effort to position the United Kingdom as a competitive hub for digital finance while maintaining regulatory safeguards. The outcome of the trial is likely to inform future policy decisions on stablecoin issuance, consumer protection and the role of digital tokens in mainstream financial services.