The United Kingdom is folding cryptoassets into existing financial services law under the principle of “same risk, same regulatory outcome,” moving away from a bespoke regime toward parity with traditional finance. Full implementation is scheduled for October 25, 2027, after a series of legislative and supervisory steps completed in 2025 and further actions planned through 2026.
The approach extends the Financial Services and Markets Act perimeter to cover three asset categories and six new regulated activities, according to the Draft Order and subsequent regulations introduced in December 2025. Firms that deal in qualifying cryptoassets, operate trading venues, provide custody, or offer lending and borrowing services will need FCA permission and must comply with the full FCA handbook, including the Consumer Duty and SMCR.
Custody and staking face particularly stringent standards. Custody will require CASS-style segregation, daily reconciliation and trustee-style acknowledgements where a firm can move client keys or liquid-staking derivative tokens. The Draft Order also creates a standalone regulated activity for qualifying cryptoasset staking, capturing pooled, delegated and liquid staking services unless they meet narrow carve-outs for pure self-directed staking or communication-only providers.
“Crypto activities presenting similar risks to traditional financial activities will be regulated comparably,” said the Financial Conduct Authority, framing the policy goal of aligning digital-asset risks with established prudential and conduct regimes.
International posture and market impact in the UK
Internationally, the UK’s model diverges from the EU’s MiCA-style bespoke rulebook and moves closer to a U.S.-aligned posture that treats certain tokens like securities. The Bank of England will retain systemic oversight, particularly for stablecoins used in payments and settlement, while the FCA will enforce conduct, market-abuse and prudential requirements through a crypto-adapted rule set (including a proposed CRYPTOPRU prudential sourcebook built on MiFIDPRU concepts).
For product teams and compliance functions this means higher upfront and ongoing costs: authorization preparation, capital and prudential requirements, custody upgrades to meet segregation and reconciliation standards, and new disclosure and prospectus-like obligations for issuers and admission documents for trading venues. Liquidity providers and derivatives desks offering rehypothecation or staking-based yield will need to reassess operational models to avoid triggering custody or prudential obligations.
Investors and market operators should watch the FCA gateway in 2026 and the end‑2026 stablecoin rule finalisation, which will determine market access, custody costs and the permissibility of staking and lending products ahead of the October 2027 implementation.
