UK FCA Proposes Crypto Regulation Aligned with TradFi
UK FCA has launched a public consultation to integrate crypto regulation into the existing FSMA 2023 framework. The proposals require digital asset firms—covering stablecoin issuance, cryptoasset custody, trading platforms, intermediation and staking—to obtain FCA authorisation. The new crypto regulation also reinforces operational resilience, anti-financial crime controls and extends the Consumer Duty to volatile crypto markets. Additionally, consumers could access the Financial Ombudsman Service for crypto disputes. Feedback is open until November 12, 2025, with final rules expected in early 2026. The move aims to balance innovation, market integrity and consumer protection, promoting a sustainable and competitive crypto sector.
Bullish
These proposals clarify the regulatory landscape and set higher operational and compliance standards. In the short term, firms may incur compliance costs and adjust operations, possibly causing liquidity shifts in tokens and trading platforms. Over the long term, enhanced transparency and consumer protection can attract institutional participation and boost market confidence. Clear rules reduce uncertainty, supporting sustainable growth and positive price momentum for regulated crypto assets.