The Financial Conduct Authority (FCA) in the UK has initiated a consultation process to clarify regulated crypto activities, signaling a shift towards comprehensive regulation by October 2027. Firms can apply for authorization starting September 2026. The FCA aims to establish an open and competitive crypto market through this initiative.
On April 15, 2026, the FCA announced that the consultation was published, detailing how services such as trading, custody, stablecoin issuance, and staking will fall under regulation. This guidance is designed to help firms navigate their regulatory status amidst a transition from a primarily unregulated space to one with defined cryptoasset service regulations.
Yuriy Brisov of Digital & Analogue Partners highlighted that the FCA’s approach focuses on an “activity-based perimeter” rather than firm-wide licensing, which involves intermediaries like issuers and custodians. He noted this strategy offers flexibility while aligning with current centralized finance taxonomy but does not fully address emerging market aspects such as non-custodial systems.
Brisov pointed out that the regulatory framework largely adapts existing tools from post-2008 financial regulations, focusing on authorisation, prudential capital, conduct rules, and market-abuse surveillance. However, it doesn’t yet tackle risks inherent to crypto technologies. The regime prioritizes custody integrity, financial crime, and market abuse but leaves issues like cross-protocol contagion less defined.
The FCA will further consult on DeFi guidance and operational resilience for distributed ledger technology firms later this year, along with updates relevant to cryptoasset operations. Following a January consultation on consumer duty and conduct standards for UK-based crypto firms, the current framework builds on February’s legislative changes that incorporated crypto activities within regulatory scope.
Crypto firms, including those based overseas but servicing UK clients, must reconsider their structures before the 2026 authorization deadline. Brisov also outlined three significant roles for banks in this context: serving authorized crypto firms, safeguarding qualifying cryptoassets, and potentially issuing tokenized deposits or stablecoins. The determination of these boundaries will be crucial for future UK monetary infrastructure.