The UK is laying the groundwork to regulate crypto under a “same risk, same regulatory outcome” model that treats comparable risks in crypto and traditional finance with comparable rules. HM Treasury is driving the policy direction, the Financial Conduct Authority (FCA) is building the rulebook, and the Bank of England (BoE) is shaping oversight where systemic stablecoins could matter, with the full regime targeted for implementation by October 2027.
At a practical level, the UK is trying to pull crypto into familiar supervisory architecture without creating a separate, standalone regime. The stated objective is to strengthen investor protection and market integrity while still leaving room for guarded innovation, and the approach is being translated into detailed measures across five activity areas to align crypto oversight with established market protections.
What the rules target across core crypto activities
For cryptoasset trading platforms (CATPs), the UK is proposing venue-style requirements around authorization, systems and controls, transparency, and market-conduct protections—especially where tokens behave like securities. The CATP proposals also address operational expectations such as location and governance-style controls, with pre- and post-trade transparency positioned as part of market integrity.
On token classification, the regime is designed to draw a sharper line between “qualifying cryptoassets” and “qualifying stablecoin” as specified investments, while keeping many utility tokens generally outside the perimeter. The intent is that security tokens fall under established prospectus, disclosure, and market-abuse frameworks, rather than being handled as a one-off crypto category.
For lending and borrowing, the FCA is proposing to restrict current crypto lending and borrowing offers to retail consumers, while asking for feedback on mitigations that could make some products retail-appropriate. On staking, the planned direction is to address technological and safeguarding risks through retail consent, key-features disclosures, capital arrangements, and segregation of customer wallets, rather than treating staking as a lightly supervised add-on.
Custody is treated as a foundational control layer. The custody proposals combine traditional asset-protection standards with crypto-specific expectations around key management, cybersecurity, and operational resilience. The through-line is that safeguarding is not optional when private keys are the control point.
How the UK plans to “wire” crypto into existing law
Instead of reinventing the legal stack, policymakers are extending core UK legislation so crypto activities are supervised through established mechanisms. The Financial Services and Markets Act (FSMA) and the Regulated Activities Order (RAO) would be amended to list new specified investments and regulated activities, bringing CATPs and related services into the FCA authorization perimeter.
The perimeter expansion is paired with tighter conduct rules. The Financial Promotion Order would apply to the new crypto activities and remove temporary provisions that previously allowed certain firms to self-publish promotions. In parallel, market-abuse rules are being adapted to address insider trading and manipulation in crypto markets, and amendments to money-laundering rules (MLRs) would broaden coverage while keeping authorized firms subject to MLR requirements.
Prudential expectations are also being shaped to ensure resilience. Consultations are setting out tailored capital and prudential standards for crypto firms to strengthen loss-absorbing capacity and operational durability. That prudential posture is a key determinant of whether crypto firms can scale within the UK without running into supervisory friction.
The timetable is already dense and staged. HM Treasury published near-final draft legislation on April 29, 2025, and the FCA followed with DP25/1 on May 2, 2025, with feedback due by June 13, 2025. The FCA also published CP25/14 and CP25/15 on May 28, 2025, then issued CP25/40, CP25/41, and CP25/42 on December 16, 2025, with responses due by February 12, 2026, and final policy statements expected in 2026.
The BoE is running its own track for systemic stablecoins. The BoE consultation on oversight of systemic stablecoins runs through February 2026, with final rules expected by late 2026. Separately, an independent review on foreign financial influence—including crypto donations—is due in March 2026, adding a political-risk and governance lens to the wider framework.
The opportunity is clarity, but the cost is real. The UK is positioning legal certainty and regulatory support—such as the FCA’s Regulatory Sandbox—as a way to encourage legitimate activity, while acknowledging that elevated compliance costs can change firm behavior. Stakeholders have also warned that stringent capital and reserve proposals for stablecoins, plus higher operational burdens, could constrain innovation or push some firms to relocate.