Regulator’s David Geale uses City & Financial speech to outline a more nuanced UK regime for cryptoassets and stablecoins
The Financial Conduct Authority (FCA) has signalled the UK is ready to become a major hub for regulated crypto and stablecoin activity, as it urged firms to start preparing now for a new authorisation regime.
Speaking at a City & Financial Global event on November 26, David Geale, Executive Director for Payments and Digital Finance and Managing Director of the Payment Systems Regulator, framed the coming rules as an attempt to balance innovation with trust and consumer protection.
Geale highlighted how deeply crypto has penetrated the UK retail market, with more than 90% of people aware of crypto and around seven million having owned it at an average exposure of just over £1,800.
Crypto, he suggested, has moved from curiosity to mainstream, while still sitting largely outside formal regulation and carrying “high levels of risk”.
Roadmap to a full UK regime
The FCA’s central message is that regulation is coming quickly and will be structured rather than piecemeal. Geale set out a roadmap built around a series of consultations, beginning with the regulator’s current paper on stablecoin issuance, custody, prudential rules and cross-cutting requirements.
Further consultations will follow on market abuse, admissions and disclosure, consumer duty and regulatory reporting, ahead of full policy statements and the opening of the gateway to firms.
The aim, he said, is a regime which is “competitive, built for the future and ready for firms” while enabling consumers to make informed decisions and understand the limits of protection available when buying crypto products.
Sandbox cohort and ‘world first’ GBP stablecoin test
Geale also used the speech to push the FCA’s use of experimentation and live testing. The regulator has already brought RegTech platform Eunice into its regulatory sandbox to work on disclosure templates designed to give investors clearer information about cryptoassets.
More notably for payments players, the FCA has launched a stablecoin-specific sandbox cohort to allow UK-issued stablecoin projects to test use cases in a controlled environment.
A “major firm” has already been accepted into the cohort and is preparing to test a GBP-denominated stablecoin for payments, which Geale described as a world first for the UK’s evolving regime.
The FCA will also host in-person stablecoin policy sprints in March, bringing together banks, payment providers and fintechs to stress-test retail and wholesale use cases and to determine where regulation is and is not needed.
No ‘lift and shift’ of traditional rules
While Geale reiterated the principle of “same risk, same regulation”, he cautioned traditional frameworks cannot simply be copied across to decentralised markets.
The speech pointed to several structural challenges:
- Decentralised assets complicate standard disclosure and due diligence.
- Legal uncertainty persists over cryptoasset ownership and location.
- Most UK consumers use overseas platforms, raising the risk of loss in insolvency scenarios.
- Distributed ledger systems do not always provide a central counterparty for contractual relationships.
Against this backdrop, the FCA plans to extend its operational resilience framework to all cryptoasset firms, aligning them more closely with banks on standards for outages, cyber incidents and technology failures.
The regulator is also exploring differentiated treatment for wholesale-facing firms versus those dealing directly with consumers, but stresses that any rebalancing of risk “cannot be at the expense of appropriate customer protection”.
Firms urged to engage early
For firms hoping to operate in the UK once the regime is live, Geale’s message was to start preparing now.
Once the new rules are in place, crypto and stablecoin businesses will need FCA authorisation to operate, and must be able to demonstrate robust governance, adequate resources and the ability to meet standards from day one.
The FCA is offering free pre-application meetings to give firms informal feedback on their plans and help first-time applicants navigate what will, for many, be their first experience of full financial regulation.
The regulator also emphasised that it wants firms to challenge its ideas where necessary and propose alternative solutions, arguing that the goal is to “facilitate growth, not stifle it”.
Positioning the UK in the global stablecoin race
Geale placed the UK’s efforts in an international context, pointing to its leadership roles within IOSCO, the Financial Stability Board and FATF, as well as its joint chairing of the Transatlantic Taskforce for Markets of the Future with US counterparts.
He directly addressed claims that the UK is falling behind the US GENIUS Act on stablecoins, arguing that detailed consultations on prudential and conduct requirements mean the UK is in some respects ahead, providing more clarity than statute alone can.
The speech closed by situating stablecoins alongside open banking, tokenised deposits and a potential central bank digital currency as part of a broader evolution in money.
The FCA’s task, Geale argued, is to ensure the UK’s National Payments Vision can be delivered while keeping systems “trusted, resilient and ready for whatever comes next”.
