FCA Consults on Next Phase of UK Crypto Regulation

The Financial Conduct Authority has launched a wide ranging consultation on proposals that will shape the next phase of the UK’s cryptoasset regulatory framework, signalling a decisive move towards bringing crypto markets closer to traditional financial services standards. Published on 16 December 2025, the consultation forms part of the FCA’s crypto roadmap and aligns with new government legislation laid on 15 December, reinforcing the UK’s ambition to create an open, competitive and trusted crypto market.

At the core of the proposals is the FCA’s stated aim to strike a balance between innovation and consumer protection. The regulator is explicit that regulation will not eliminate risk from cryptoassets, but instead seeks to ensure that consumers understand those risks before investing. By applying familiar regulatory principles from traditional finance, such as transparency, market integrity and proportionate firm obligations, the FCA is signalling that crypto is no longer being treated as an exceptional or peripheral asset class.

The consultation covers a broad set of activities across the crypto ecosystem. Proposals on admissions and disclosures would require clearer, more standardised information for investors at the point cryptoassets are listed or offered. Market abuse measures are intended to tackle insider dealing and manipulation, addressing long standing concerns about fairness and confidence in crypto markets. The FCA is also consulting on conduct and operational standards for cryptoasset trading platforms, alongside requirements for brokers and other intermediaries to ensure responsible behaviour.

Notably, the proposals extend into higher risk and more complex areas of the market. The FCA is seeking views on how staking services should present risk to consumers, how lending and borrowing arrangements can be structured more safely, and whether decentralised finance should ultimately be subject to the same regulatory expectations as traditional financial services. Prudential requirements are also proposed, reflecting a growing regulatory focus on the financial resilience of crypto firms themselves rather than solely on consumer disclosures.

The consultation also provides important clarification for stablecoins. UK issuers of stablecoins will be prohibited from passing interest earned on backing assets to holders, with the FCA continuing to consider whether alternative financial incentives may be appropriate when UK issued stablecoins are used. This signals a cautious but deliberate approach to integrating stablecoins into the UK regulatory perimeter without undermining consumer protections or financial stability.

From a compliance perspective, the FCA has reiterated that while the broader crypto regime is still being developed, cryptoassets remain largely unregulated beyond financial promotions and financial crime controls. Firms seeking registration under the Money Laundering Regulations 2017 are encouraged to engage early, with the FCA continuing to offer pre-application support, sector specific webinars and direct engagement with compliance teams.

Consultation responses are open until 12 February 2026. Given the breadth of the proposals and their potential impact across trading, custody, DeFi and stablecoins, this consultation represents a critical opportunity for firms to influence the final shape of the UK’s crypto regulatory regime. It also marks a clear shift away from a transitional approach towards a more permanent, structured and enforceable framework for cryptoassets in the UK.

Read the press release here.