**UK Regulators Eye Stablecoin Impact**

UK regulators are increasingly concerned about stablecoins and their potential impact on financial stability. Recent meetings highlighted the growing interconnectedness of crypto markets with the real economy, prompting a focus on stablecoin resilience.

Key concerns include liquidity, credit, and market risks of backing assets. The rise of sterling offshore stablecoins with inappropriate backing is particularly alarming, posing risks of currency substitution.

The UK isn't alone; the European Securities and Markets Authority also warns of crypto's threat to financial stability, urging insurance firms to bolster capital against crypto holdings.