The UK’s financial regulator has confirmed that cryptocurrencies such as bitcoin and ethereum will fall outside its remit, but attempts to create less-volatile digital cash through so-called stablecoins may be regulated.

The Financial Conduct Authority said in January it would set rules governing digital assets, dividing the field into three types of product: classic cryptocurrencies such as bitcoin; “security tokens”, which are digital versions of traditional investment assets; and “utility tokens”, such as the digital “coins” created in initial coin offerings, where companies raise funding by issuing bespoke digital cash that typically can only then be used to purchase services from that company.