- UK finalizes crypto rules with mandatory FCA licensing from October 2027.
- Crypto firms must reapply as AML registrations won’t convert automatically.
- FCA cuts stablecoin capital requirement from 2% to 1% after industry feedback.
The Financial Conduct Authority (FCA) published its final crypto framework on Tuesday, introducing mandatory licensing, capital requirements, market abuse rules, and stablecoin standards that will take effect on October 25, 2027.
The framework completes the FCA’s multi-year crypto roadmap and places exchanges, custodians, stablecoin issuers, staking providers, lending platforms, and other crypto intermediaries under a unified regulatory regime.
The move makes the UK one of the few jurisdictions, alongside the European Union’s MiCA framework, with a comprehensive set of crypto regulations.
Authorization Becomes Mandatory for Crypto Firms
All crypto businesses serving UK customers will need FCA authorization to continue operating. The application window opens on September 30, 2026, and closes on February 28, 2027, giving firms roughly one year to secure approval before the regime becomes mandatory.
Companies already registered under the UK’s anti-money laundering (AML) framework will not automatically qualify under the new rules.
Every firm must submit a fresh authorization application, although businesses already operating in the country may continue certain activities during a temporary transition period under the FCA’s “savings provisions.”
The regulator will begin offering pre-application support meetings from July 2026, while additional policy guidance is expected through a webinar on July 17 and another policy statement in September.
David Geale, the FCA’s Executive Director of Payments and Digital Finance, said the framework aims to give firms regulatory certainty while still allowing room for innovation. He added that crypto businesses will now be held to standards similar to those applied across the wider financial services industry.
Capital Rules Tightened, Stablecoin Requirements Relaxed
The FCA has introduced a single capital requirement requiring firms to hold capital equal to 40% of their net risk exposure for eligible crypto assets admitted to UK trading platforms. Earlier proposals had suggested higher requirements for some assets, but the regulator simplified the framework after industry feedback.
Stablecoin issuers also received concessions. The additional capital requirement for non-systemic stablecoin issuers has been reduced to 1% of issuance, down from the originally proposed 2%.
The regulator also removed the requirement for stablecoin issuers to forecast future redemption demand. Instead, firms must maintain statutory trust arrangements for reserve assets, provide users with defined redemption rights, allow up to 5% excess backing assets, and may use limited intragroup custody under specific safeguards.
Later this year, the FCA will consult with the Bank of England on how these rules should apply to stablecoin issuers that become systemically important.
Annual Stress Tests and Market Abuse Rules Introduced
The new framework significantly increases ongoing supervision of crypto companies. Firms must perform annual stress tests to demonstrate they can survive severe market downturns.
Unlike UK banks, which receive scenarios from the Bank of England, crypto firms will develop their own stress test assumptions based on internal risk assessments before submitting the results to the FCA.
The regulator is also extending insider trading and market manipulation rules to crypto assets listed on FCA-authorized trading platforms. Platforms generating more than £10 million in annual revenue must share surveillance data with other exchanges to improve the detection of cross-platform market abuse.
The FCA confirmed that legitimate activities such as token burns and stabilization measures during token launches will remain permitted under the new framework.
Related: Baillie Gifford Launches UK’s First Fully Tokenized Fund
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