FCA Pushes Ahead With Major Crypto Rules in Final Consultation Stage

The UK’s financial regulator is moving into the final and most consequential phase of its crypto rulemaking process, marking a major step forward in the country’s long-planned digital asset oversight framework.

The Financial Conduct Authority (FCA) announced on Friday that it is now formally seeking industry feedback on 10 key regulatory proposals, calling the consultation round the “final step” before concrete rules are drafted. The initiative forms a core pillar of the UK government’s crypto roadmap, which aims to balance innovation with market safeguards while bringing the sector closer to traditional financial oversight.

“These proposals continue our progress towards an open, sustainable and competitive crypto market that people can trust,” the FCA said in a statement. 

“At the same time, risks remain, and we want a market where innovation can thrive, but where people understand the risks. But regulation can’t — and shouldn’t try — to get rid of all risk. We want those interested in investing in crypto to understand that risk.”

10 Proposals That Could Redefine the UK’s Crypto Market

The FCA’s consultation covers a wide array of topics that could reshape the operational, compliance and consumer-facing landscape for crypto firms. The package examines new rules governing:

• Business standards and conduct
• Credit-based crypto purchases
• Regulatory reporting obligations
• Safeguarding of customer assets
• Treatment of collateral for retail borrowers
• Market integrity and oversight
• Operational resilience
• Risk disclosures
• Custody protections
• Governance expectations

This extensive package, first unveiled in December, is designed to align crypto oversight with the regulatory principles already applied in traditional finance—an approach UK officials have repeatedly emphasized as essential for building a trustworthy digital asset ecosystem. The deadline for feedback on the proposals is March 12.

Part of a Larger Government Roadmap

The FCA says it has made “significant progress” in fleshing out the regulatory architecture outlined in the government’s crypto strategy. 

That roadmap aims to give the UK a competitive position as a global crypto hub while preventing the types of market failures that prompted regulators worldwide to tighten their grip following the FTX collapse and other high-profile failures.

The UK’s approach contrasts with the EU’s recently implemented MiCA framework. Instead of a single, comprehensive rulebook, UK regulators are building a layered, sector-specific structure that incorporates both existing financial rules and new crypto-focused standards.

Licensing Regime on the Horizon

One of the most consequential pieces of the roadmap is the introduction of a licensing regime for crypto asset service providers—bringing them under much tighter supervision. 

Earlier this month, the FCA announced its expected timeline: the application window for crypto firms to register will open in September 2026, though the exact date will be confirmed later.

The new licensing system will mandate that crypto firms operating in the UK apply for FCA authorization, meet capital and safeguarding standards, implement compliant governance structures, and adhere to strict reporting rules. It is expected to significantly narrow the number of firms operating in the country, given the FCA’s historically rigorous vetting process.

Market participants have long criticized the FCA’s temporary registration regime for being slow and opaque, with only a small number of applicants receiving approval. But the incoming licensing framework is meant to formalize the process and align the crypto sector with traditional financial institutions subject to the same level of scrutiny.

Balancing Innovation With Consumer Protection

Despite the more stringent expectations, the FCA has repeatedly stressed that its goal is not to stifle innovation. Instead, it aims to build a market where companies can innovate while consumers clearly understand the risks and firms meet robust standards for fairness, transparency and safety.

Regulators noted that crypto markets inherently carry volatility and counterparty risk, warning that no regulatory framework can—or should—erase those realities. Instead, the FCA hopes to create an environment where firms compete on clear rules and investors can make informed decisions.

The next several months will shape the final contours of the UK’s crypto regulatory landscape. With the consultation nearing its close and the licensing regime approaching, the UK is positioning itself for a new era of regulated digital asset activity—one that could influence standards across Europe and beyond.