SS #56 - FCA Targets 2026 for Stablecoin Payments

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Good morning!

Our top news come from the UK, where the financial regulator has committed to a firm 2026 deadline for finalizing its digital asset framework. This includes prioritizing the live testing of UK-issued sterling stablecoin payments, a bold strategy intended to boost the country's global competitive standing. Shifting gears to layer-one innovation, the new payments-focused blockchain Tempo has launched its public testnet, directly competing with the institutional rails being developed by Circle’s Arc.

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In Today's Edition:

• Headline: FCA Targets 2026 for Stablecoin Payments

• Quick Bites: Tempo Launches Public Testnet.

• Yield of the Week: 17.67% APY on Upshift

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HEADLINE

State of play: The UK regulator has set a firm 2026 deadline for finalizing digital asset rules and supporting the live testing of sterling stablecoin payments, aiming to reclaim its competitive edge in global finance.

• The FCA has targeted 2026 for both the implementation of a comprehensive regulatory regime (covering stablecoins, custody, trading, etc.) and the priority rollout of stablecoin payments.

• Regulatory efforts are gaining speed, evidenced by the recent opening of a dedicated stablecoin regulatory sandbox with an application deadline of January 18.

• The FCA is explicitly embracing an "outcomes-not-prescriptive-rules" approach to balance innovation with consumer protection, despite past criticism that its cautious stance cost the UK its crypto-hub status.

What’s Next: The immediate outcome will be a strong surge in applications for the new stablecoin regulatory sandbox, quickly followed by increased investment and development in UK-issued sterling stablecoins as firms prepare for the 2026 regulatory implementation.

Why it Matters: This news offers unprecedented regulatory clarity and a firm timeline, positioning the UK as an attractive hub for compliant institutional adoption and allowing the British pound to potentially be established as a major digital fiat standard globally.

Our Take: The FCA's commitment is a strategic and necessary pivot that creates a major opportunity for early-moving firms to participate in the stablecoin sandbox and co-create the final regulatory rulebook, though success hinges entirely on the regulator's ability to execute this comprehensive framework by the 2026 deadline.

QUICK BITES

• Stripe acquires Valora wallet.

• Tempo launches public testnet.

• KindlyMD enters $210M USDT loan agreement with Kraken.

• Circle tests privacy-preserving wrapped version of USDC on Aleo.

• BMW taps JPMorgan for first onchain programmable FX payment.

• Malaysia’s Royal unveils ringgit-backed stablecoin for APAC payments.

• Tether rolls out privacy-focused health app as expansion into AI accelerates.

• Revolut and Trust Wallet launch instant crypto buys in EU with self-custody focus.

YIELD OF THE WEEK

Upshift K3 Neutrl NUSD Vault: 10% APY

• The Upshift K3 Neutrl NUSD Vault is designed to maximize returns and capture potential future airdrops by strategically providing liquidity across established "blue chip" DeFi protocols.

• The vault’s primary farming strategy involves utilizing both NUSD and its staked equivalent, sNUSD, within the Curve and Pendle ecosystems.

• The vault is professionally managed by K3 Capital, and importantly, no management fees are currently charged to participants.

Upshift Resolv USR Yield Maxi: 17.67% APY

• The Upshift Resolv USR Yield Maxi Vault systematically maximizes USR returns by employing automated looping strategies involving USR, wstUSR (wrapped staked USR), and PTs (Principal Tokens).

• The vault's capital is actively deployed across leading lending markets on the Ethereum Mainnet, specifically citing Morpho, Euler, Fluid, and Gearbox, with current deployment focused on Fluid and Silo.

• The vault is managed by M1 Capital and currently operates with a transparent cost structure, charging no management fees to participants.

Upshift Gamma USDC Vault: 12% APY

• The Upshift Gamma USDC Vault aims to maximize returns while actively mitigating risk through a market-neutral positioning that utilizes delta-hedged and cross-chain farming opportunities.

• The core objective of the strategy is the generation of consistent yields, with a strong emphasis placed on capital protection and minimizing downside risk.

• The fund's assets are currently distributed across DeFi protocols including Almanak, Pendle, Aerodrome, and Curvance, and the vault is managed by Gamma Research with no fees charged.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.