The FCA Finalises the UK Cryptoasset Regime: Final Rules Published

‍The Policy Statements

The policy statements are:

• PS26/9: Admissions and Disclosures (A&D) and Market Abuse Regime for Cryptoassets (MARC)
• PS26/10: Stablecoin issuance
• PS26/11: Regulated cryptoasset activities
• PS26/12: A prudential regime for cryptoasset firms
• PS26/13: Application of the FCA Handbook for Regulated Cryptoasset Activities

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The full FCA overview is available here.

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Who This Affects

The FCA states that the policy statements apply to firms that carry out, or intend to carry out, one or more regulated cryptoasset activities or designated activities under the Cryptoassets Regulations, as well as:

• Firms that are registered with [the FCA] under the Money Laundering Regulations.
• Firms subject to the Financial Promotions regime where they are marketing cryptoassets to UK consumers.
• Consumers and firms that use, or propose to use, or interact with, qualifying stablecoins or qualifying cryptoassets.
• Issuers of electronic money and payment service providers, where their activities intersect with the cryptoasset regime.
• Overseas firms and market participants with an interest in providing cryptoasset services to UK consumers or operating in the UK market.

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What Firms Need to Read

The rules that apply will depend on the products and services provided by each firm and that firm's business model.

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Core Requirements

All firms carrying out regulated cryptoasset activities should read the following policy statements:

• PS26/13: Applying the FCA Handbook, together with FG26/5: Guidance on the Application of the Consumer Duty to Cryptoasset Firms, FG26/6: Cryptoasset Operational Resilience and FG26/7: Approach to international cryptoasset firms;
• PS26/12: Prudential Requirements, together with the guidance consultations GC26/4 (COREPRU) and GC26/5 (CRYPTOPRU); and
• the Aggregate Cost Benefit Analysis.

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Activity Specific Requirements

Stablecoin Issuers and Custodians should read:

• the Stablecoin Issuance policy statement, which covers rules relating to backing assets and safeguarding, redemption requirements, and disclosures to holders;
• the joint publication with the Bank of England relating to dual regulation of systemic stablecoins; and
• Section 4 of the joint Guidance on the operation of the Digital Securities Sandbox, which has been updated to permit stablecoins to be used as a settlement asset in the Digital Securities Sandbox provided they meet the minimum criteria set out within the guidance.

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Firms providing Cryptoasset Services (trading, dealing, custody, staking or lending and borrowing) should read the Regulated Cryptoasset Activities policy statement, which covers activity specific rules for firms who are trading platforms or intermediaries, safeguarding (custody) of client cryptoassets, lending and borrowing, and staking providers.

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Firms issuing, admitting or trading cryptoassets should read the Admissions and disclosures (A&D) and market abuse (MARC) policy statement, which covers disclosure requirements for offers and admissions, due diligence and admission standards, and market abuse controls.

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What Is Changing

Applying the FCA Handbook

The FCA will apply the key FCA Handbook obligations across regulated cryptoasset activities, including the Consumer Duty, COBS, SM&CR, operational resilience and financial crime frameworks. Further enhancements include updated Consumer Duty and operational resilience guidance, and clarity on the treatment of jointly regulated stablecoin issuers.

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Stablecoin Issuance

The FCA has maintained the core framework as consulted on, while improving proportionality and clarity. Key changes include:

• Backing assets: the backing asset composition requirement has been simplified (issuers no longer have to estimate redemption forecasts); statutory trust arrangements for backing assets are confirmed; unallocated backing fund accounts are removed; and up to a 5% excess may be held in the backing asset pool.
• Custody: limited intragroup custody is permitted, subject to safeguards.
• Redemption: redemption timelines have been adjusted to ensure they are operationally effective, with additional clarity on the application of redemption requirements to the secondary market.
• Disclosures: holders will have access to historical disclosures, and obligations have been strengthened to make sure prospective holders are aware of their withdrawal rights.

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The policy establishes a baseline regime for stablecoin issuance, with further work planned as stablecoin use cases (such as use for payments) evolve, and on the resolution of stablecoin issuers.

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Regulated Cryptoasset Activities

• UK QCATP operators and intermediaries: principal dealers are removed from pre-trade transparency requirements; guidance is updated for dual-regulated firms; and the FCA has confirmed that best execution requires effective overarching arrangements rather than transaction-by-transaction checks, supported by periodic monitoring and post-trade analysis, generally maintaining a principles-based approach.
• Lending and Borrowing: core retail protections are maintained, including enhanced disclosures, consent, appropriateness testing, record-keeping, over-collateralisation and negative balance protection. Targeted amendments to collateral arrangements permit the staking of retail client collateral (subject to CASS 17) and clarify that limits on automatic collateral top-ups apply only to firms.
• Safeguarding: CASS 17 will apply to client cryptoassets, with enhanced protections around ownership rights, record-keeping, reconciliation and private key management, targeted exceptions to trust requirements, an increased 2% settlement float limit, and a technology-agnostic approach to private key management. CASS 17 will not apply to relevant specified investment cryptoasset (RSIC) custody at this stage: firms seeking authorisation to provide RSIC custody will need to do so as a cryptoasset custodian but will apply CASS 6 when safeguarding RSICs for the time being. CASS 7 will apply to client money arising in connection with the safeguarding of client cryptoassets; firms issuing qualifying stablecoins will not be subject to CASS 7.
• Staking: requirements for disclosures, contractual terms, client consent and record-keeping are maintained. The rules have been amended to avoid unintended restrictions on auto-staking arrangements, allowing consent to cover ongoing staking of current and future holdings subject to conditions and annual notification.
• Decentralised Finance (DeFi): the rules and guidance will apply to DeFi firms where there is an identifiable controlling entity, consistent with the Treasury defined perimeter. The FCA will take a case-by-case approach to assessing scope and will consult on tailored DeFi guidance.

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Admissions and Disclosures (A&D) and Market Abuse Regime for Cryptoassets (MARC)

The FCA has maintained the core framework consulted on in CP25/41, while making targeted changes to improve proportionality, clarity and operability:

• A&D: requirements relating to due diligence, admission criteria and the trigger for supplementary disclosure documents have been clarified; a digital token identifier standard has been specified across A&D and MARC; withdrawal rights notifications have been strengthened; and the exception allowing qualifying cryptoassets to be admitted to trading without a QCDD where fungible with those already admitted on the same platform has been removed.
• MARC: the industry-led framework and the threshold for large UK QCATP operator obligations are retained; the on-chain monitoring requirement for large UK QCATPs has been narrowed; key requirements relating to inside information disclosure and intermediary notifications to UK QCATPs have been clarified; and legitimate market practices have been refined, with examples of inside information added.

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Prudential

• Stablecoin issuance capital requirement: the coefficient of K-SII is reduced from 2% to 1%, making the prudential framework more proportionate for larger issuers while maintaining the robustness of the overall regime.
• Market risk and counterparty default risk: the proposed two-tier classification (Category A / B) has been replaced with a simplified framework. Cryptoassets that can be prudently valued and are admitted to a UK qualifying cryptoasset trading platform will be subject to a single 40% net risk position requirement for K-NCP and a 40% volatility adjustment for K-CCD. Cryptoassets that do not meet these conditions are deducted from regulatory capital and subject to a 100% volatility adjustment for K-CCD.
• Public disclosure: the proposed requirement to publicly disclose the own funds threshold requirement (OFTR) and the liquid asset threshold requirement (LATR) has been removed. Where a firm's permanent minimum requirement (PMR) is the binding component of its own funds requirement, no public disclosure is required; disclosure is required where the fixed overheads requirement (FOR) or K-factor requirement (KFR) is the binding component.

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Next Steps: What Firms Need to Do

Firms that carry out, or intend to carry out, regulated cryptoasset activities should familiarise themselves with the policy statements, rules and guidance relevant to their business models and assess whether they will require FSMA authorisation or a variation of permission under the new regime.

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Existing registrations will not convert automatically. Firms currently registered under FSMA, the Money Laundering Regulations, or authorised under the Payment Services Regulations or Electronic Money Regulations, and firms currently relying on a s.21 financial promotions approver will need to be authorised if they are within scope of a regulated cryptoasset activity.

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If a firm wishes to rely on the savings provisions, the application window is scheduled to open on 30 September 2026 and close on 28 February 2027. Firms should apply as early as possible within this window to maximise the period during which they can continue operating under the savings provisions while their application is assessed. Firms that apply within the window may, subject to meeting the relevant conditions, continue specified activities until a determination is made on their application. Firms that apply after the window closes will not be able to rely on these provisions and may need to cease carrying on relevant activities until they are authorised.

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How We Can Help

The final rules are extensive, and where each firm stands under them is a question of legal analysis, not assumption. Every firm operating in or into the UK cryptoasset market should seek legal advice on where it stands under the new regime, and on the strength of its pathway to authorisation.

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LawBEAM advises token issuers, stablecoin issuers, exchanges, custodians, staking providers and intermediaries on UK cryptoasset regulation. We can help you:

• Determine your perimeter position: a precise analysis of whether your activities constitute regulated cryptoasset activities under the Cryptoassets Regulations, and which policy statements apply to your business model.
• Plan your authorisation strategy: scoping the permissions you need, sequencing your application against the 30 September 2026 to 28 February 2027 savings provisions window, and preparing a regulatory business plan that meets the Threshold Conditions.
• Close the gap: a gap analysis of your current arrangements against the CRYPTO sourcebook, CASS 16 and 17, COREPRU and CRYPTOPRU, the Consumer Duty, and operational resilience requirements.
• Structure for the UK: advice for overseas firms on the FCA's approach to international cryptoasset firms and what a compliant UK presence requires.

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About LawBEAM

LawBEAM's leading crypto team has extensive experience helping firms navigate complex legal and regulatory change. We represent UK and international crypto firms and advise on legal and regulatory strategy that positions our clients for success in international markets. Please contact our team to discuss how we can support your legal and regulatory needs.