Britain’s financial technology giant Revolut will participate in an experimental program to test a digital currency linked to the British pound, according to Wednesday’s announcement from the Financial Conduct Authority.
The experimental initiative falls under the regulator’s controlled testing environment, known as a “sandbox” program, which permits companies to examine stablecoin products under supervised conditions.
Major British financial institutions have demonstrated more conservative attitudes toward stablecoins—digital currencies tied to traditional money—compared to their counterparts in Europe and the United States, influenced partly by reservations from the Bank of England.
Bank of England Governor Andrew Bailey has indicated his preference for financial institutions to concentrate on “tokenised” or blockchain-based deposits as an alternative approach.
The regulatory authority confirmed that alongside Revolut, three other companies—Monee Financial Technologies, ReStabilise, and VVTX—will participate in the testing phase, examining potential applications including payment systems, wholesale settlement processes, and cryptocurrency trading.
Revolut, headquartered in London, has experienced significant expansion in recent years and currently holds the position as Europe’s highest-valued financial technology company.
The firm, which obtained a restricted UK banking license in 2024 while continuing to pursue full licensing approval, announced it will commence stablecoin testing work “this quarter.”
According to an informed source, the testing efforts will concentrate on creating a pound-based stablecoin.
The stablecoin market has experienced dramatic growth recently, with El Salvador-based Tether leading the sector by reporting over $180 billion worth of its dollar-linked tokens currently in circulation.
Research from AFME in October revealed that European stablecoins, including those based on the euro, British pound, and Swiss franc, account for less than 0.2% of the worldwide market.
While stablecoins primarily serve cryptocurrency trading purposes, some banking institutions believe they could enhance the efficiency of traditional financial services.
In 2023, the Bank of England advised banks interested in issuing stablecoins to use distinct branding to prevent customer confusion between the safeguards provided for traditional bank deposits versus those offered for stablecoins.
