Key facts
- The UK's Financial Conduct Authority (FCA) has finalized its crypto regulatory framework.
- Crypto firms must obtain FCA authorization to operate in the UK.
- The deadline for firms to apply for authorization is February 28, 2027.
- New rules include mandatory licensing, capital stress-testing, and improved market manipulation standards.
- Stablecoin issuers will have simplified capital requirements and specific user withdrawal rights.
The UK's Financial Conduct Authority (FCA) has finalized a comprehensive crypto regulatory framework, establishing mandatory licensing for crypto firms and setting a deadline of February 28, 2027, for authorization. The new rules aim to bring digital assets under regulatory standards similar to traditional financial services, providing regulatory certainty while allowing for innovation.
The framework includes requirements for capital stress-testing, enhanced market manipulation and insider trading regulations, and simplified capital standards for stablecoin issuers. Companies already registered for anti-money laundering purposes must apply for new FCA authorization, though transitional provisions will allow specified activities for a limited period while firms seek approval.
Firms can expect pre-application support meetings starting in July, with the FCA set to outline policy statements in a webinar on July 17. Further policy statements in September will clarify the regulatory perimeter for cryptoasset activities.
For stablecoin issuers, the framework includes a reduced capital coefficient of 1% of the aggregate value of issued tokens, statutory trust over reserves, and specific withdrawal rights for users. The FCA will also consult with the Bank of England later this year on rules for systemic stablecoin issuers and plans separate consultations on decentralized finance (DeFi) guidance and operational resilience for DLT firms.