UK financial regulator plans to authorise crypto firms by 2026

The regulator intends to hold consultations with industry participants and develop new rules before implementation. 

The upcoming framework will represent a significant shift from the current anti-money laundering (AML) registration requirements. Under the new regime, cryptocurrency exchanges, stablecoin issuers, and other digital asset firms will need to obtain authorisation rather than just registering for AML compliance. This transition is expected to introduce a more extensive set of regulatory requirements. 

The FCA has announced plans to publish discussion papers covering various aspects of the industry, including stablecoins, trading platforms, staking, and prudential exposure to crypto assets. The final policy papers are anticipated in 2026, setting the stage for the new regulatory framework.

Previous registration challenges 

According to Coindesk, Since launching its AML registration process in 2020, the FCA has received 368 applications, approving only 50 firms, or roughly 14% of applicants. Under the forthcoming system, firms that previously obtained registration may need to undergo a fresh authorisation process, as the scope of regulatory requirements expands. 

A representative from the FCA indicated that while existing registrants’ transition to the new framework remains under discussion, firms seeking wider permissions will likely have to reapply. The regulator intends to engage with stakeholders to clarify the specifics of the authorisation process before its official introduction.

Defining regulated activities 

Legislation will determine which cryptocurrency-related activities fall under the scope of regulation. The UK government has previously indicated that stablecoin issuance, crypto-to-fiat payments, exchange services, and lending activities would be among those requiring authorisation. Stablecoins, initially set to be incorporated under UK payment regulations, will instead be subject to a separate regulatory approach. The FCA expects to consult on draft stablecoin rules in early 2025. 

A representative from the FCA noted that while existing financial regulations provide a framework, stablecoins present unique challenges that require adjustments to traditional regulatory models.