FCA plans new Crypto Asset regulation in UK
- Neil Mathieson
- Apr 7
- 2 min read
Updated: 6 days ago
Take-Aways
Financial Conduct Authority (FCA) plans new crypto asset regulation in UK.
Consultants are to commence in 2025, likely to take effect in late 2026.
The regulatory scope is to include more activities.
Market participants should expect tougher authorisation and compliance standards.
Regulatory development consistent with development in EU and US.
Background to Crypto Asset Regulation in UK
On 28th March 2025, Coindesk reported the FCA’s intention to reform crypto asset regulation in the United Kingdom. This is consistent with the FCA's roadmap for crypto, specifically the Gateway process and wider strategy to boost innovation and fight financial crime.
At present UK regulation is focused on anti-money laundering (AML) however the number of authorisations since 2020 has been low, at 50 from 368 applications. This makes the UK relatively small in crypto considering the size of its financial markets.
The new framework is expected to bring additional scope. More participants will be in scope, including cryptocurrency payments, lending, exchange trading and related activities. More processes can also expected to be in scope from authorisation, to client onboarding, compliance, and reporting.
Stablecoins may yet be in scope or incorporated under UK payment regulations.
The move follows the EU’s Markets in Crypto-Assets Regulation (MiCA) which came into effect in June 2023 and is reflective of trends to improve the anti-money laundering, consumer conduct, and financial strength of market participants. The UK will also monitor developments in the United States where cryptocurrency regulation will evolve rapidly.
Just 12% of UK adults own crypto assets
Expected impact of Crypto regulation in UK
Existing authorised firms may have to re-apply; all market participants should expect higher standards in the following areas:
Authorisation: Getting approval for crypto asset activities in the UK will take longer as the scope and standards increase.
Compliance: Market participants can expect to demonstrate proactive management. The requirements may be similar to payments where identity, source of funds, travel rules, and suspicious transaction checks occur.
Consumer Protection: Many regulators have implemented tougher rules relating to ‘capital at risk’ disclosures. Safeguarding of funds may apply in some circumstances.
Prudential Regulation: Due to the volatility and risk associated with cryptocurrency, it is possible the FCA will seek effective risk management and potential capital and liquidity buffers.
The new regulation is likely to help increase digital asset adoption in the UK and enable new services, however the cost of being authorised and compliant is likely to increase for participants.
Next steps
The FCA will shortly launch consultations with industry participants to develop new rules and procedures.
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