Key Highlights

  • The FCA published final policy statements covering prudential requirements, market abuse controls, and stablecoin rules for exchanges, custodians, stablecoin issuers, staking firms, and certain DeFi providers.

  • Firms can apply for authorization from September 30, 2026 to February 28, 2027, ahead of the October 25, 2027 implementation; existing AML registrations do not convert automatically.

  • After industry feedback, the FCA cut the K-SII capital coefficient for stablecoin issuance from 2% to 1%, and replaced a two-tier crypto classification with a single 40% net risk position requirement.

The UK's Financial Conduct Authority on Tuesday finalized a sweeping crypto regulatory framework introducing prudential requirements, market abuse controls, and stablecoin standards ahead of a mandatory authorization regime set to take effect on October 25, 2027.

The framework applies across the full range of regulated crypto activities, covering trading platforms, custodians, stablecoin issuers, lending and borrowing providers, staking firms, and certain DeFi firms where an identifiable controlling entity exists. The FCA published the final rules in a set of policy statements drawing on existing financial services standards where risks are comparable, alongside new conduct, operational resilience, and consumer protection requirements specific to crypto.

For trading platforms, the rules introduce disclosure and due diligence requirements for assets admitted to trading. The FCA removed a previous exception that allowed fungible cryptoassets to be listed without a disclosure document. The market abuse framework introduces rules against insider trading and market manipulation, retaining an industry-led compliance approach for large platform operators while refining inside information disclosure requirements and intermediary notifications.

Stablecoin issuers face new rules on reserve backing, safeguarding arrangements, redemptions, and customer disclosures. The FCA allows backing pools to hold up to 5% in excess assets. Following industry feedback, the regulator revised its prudential framework, cutting the K-SII capital coefficient for stablecoin issuance from 2% to 1%. Eligible cryptoassets admitted to UK platforms will face a single 40% net risk position requirement, replacing a previously proposed two-tier classification system.

Firms seeking authorization can apply between September 30, 2026, and February 28, 2027. The FCA is offering pre-application support meetings from July onward. Existing registrations under anti-money laundering regulations will not convert automatically, and firms must obtain fresh FCA authorization under the new framework. The regulator said its oversight until October 2027 will remain limited to financial promotions and AML requirements.