A New Era for UK Crypto Regulation: Roadmap to 2026

The UK’s approach to cryptoasset regulation is evolving rapidly, with the Financial Conduct Authority (FCA) taking center stage in designing a comprehensive framework that will govern the industry by 2026. The recently published roadmap offers a clear pathway for implementing these regulations, spanning multiple phases and addressing key areas like stablecoin regulation, market abuse, trading platforms, and prudential standards.

This timeline represents a significant moment for the industry, moving away from piecemeal regulation to a cohesive and robust framework. For firms operating in the crypto space, the roadmap provides critical clarity on expectations and timing, enabling early planning and preparation.

Phase 1: Building the Foundation (2024–2025)

The groundwork for the new regulatory regime is already being laid. In the final quarter of 2024, the FCA plans to publish a discussion paper (DP) focusing on admission and disclosure requirements for cryptoassets, alongside measures to prevent market abuse. These early steps aim to ensure transparency and accountability, establishing standards for processes such as admission to trading, information disclosure, and liability for issuers. The FCA will also explore systems and controls to manage market abuse risks, including the handling of inside information and information-sharing protocols.

Early in 2025, the focus will shift to broader operational areas. The FCA’s discussion papers in Q1 and Q2 will cover critical topics such as:

• Trading platforms: Rules around platform access, order matching, and transparency.
• Intermediation: Standards for order handling and execution, ensuring fairness and efficiency.
• Lending and staking: Introducing ownership and disclosure requirements to address risk and consumer protection concerns.
• Prudential requirements: Proposals for managing cryptoasset exposures, including capital and liquidity standards.

Simultaneously, the FCA will publish a consultation paper (CP) addressing stablecoins, custody, and prudential requirements. Stablecoin rules will focus on backing assets, redemption mechanisms, and segregation of funds, while custody proposals will introduce stricter record-keeping and reconciliation standards.

Phase 2: Broadening the Scope (Q3 2025–Q1 2026)

By mid-2025, the FCA will release additional consultations to expand regulatory oversight. A key focus will be conduct and firm standards across all regulated activities under the Financial Services and Markets Act 2000. This includes enhancing systems and controls to manage operational resilience, financial crime risks, and governance frameworks like the Senior Managers and Certification Regime (SMCR).

The FCA will also refine its earlier discussion paper on admissions, disclosures, and market abuse, delving deeper into the requirements for disclosure processes, due diligence, and liability. These measures aim to instill confidence in market integrity while holding firms accountable for maintaining high standards.

?Phase 3: Finalisation and Implementation (2026)

The FCA plans to finalise its rules in 2026, marking the full implementation of the UK’s crypto regulatory regime. By this stage, all policy statements will have been published, and the authorisation gateway will open, allowing firms to apply for regulatory approval to operate within the framework.

From admission and disclosure processes to prudential standards, firms will need to demonstrate full compliance with the FCA’s requirements. These rules are designed to promote transparency, ensure robust consumer protections, and enhance the sector’s resilience to financial crime and market abuse.

Stablecoins and Unified Regulation

A key highlight of the roadmap is the simultaneous regulation of stablecoins and the broader cryptoasset ecosystem. Unlike previous proposals to regulate stablecoins separately, the FCA has opted for a unified approach. Stablecoin issuers will be required to comply with stringent new standards under the Financial Services and Markets Act, including enhanced rules for the custody of backing assets and mechanisms for redemption.

Custody frameworks will also be extended to the entire cryptoasset market, requiring robust reconciliation processes and the segregation of client assets. These measures will ensure consistency across the regulatory landscape, reducing risks for consumers and investors alike.

A Transformative Moment for the Industry

The FCA’s roadmap provides a clear structure for the future of cryptoasset regulation in the UK. By aligning stablecoins and cryptoassets under a single framework, the FCA is setting a global benchmark for comprehensive, consumer-focused regulation. The phased approach allows firms to adapt incrementally, fostering a balance between innovation and market stability.

As the crypto sector matures, firms that prioritise compliance and operational resilience will be best positioned to thrive under the new regime. With the full framework set to go live in 2026, the UK is poised to lead the way in shaping a secure, transparent, and competitive crypto market.

The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.