The Financial Conduct Authority (FCA) revealed last Friday its crypto asset regulatory market has taken three years to formulate and focuses on market integrity and stablecoin issuance.
The Financial Conduct Authority (FCA) wants to build a regulated crypto asset market built on clear rules, market integrity, strong consumer protections and innovative competition ahead of its launch on 25 October 2027.
Revealing its crypto asset legislative framework during a webinar on 17 July 2026, Jane Moore, the FCA’s Head of Department of Payments and Digital Assets, said that the financial regulator has been developing the framework for the last three years.
In the FCA’s last webinar in January, ‘New regime for cryptoassets regulation’, the regulator revealed that the application process for all operators intending to launch services in the UK starts in August 2026 for pre-applications, 30 September 2026 for official submissions, with 28 February 2027 being the final deadline for application submissions.
Moore said that the framework has been built through customer engagement with industry, consumer and global partners. The new crypto asset regulations will form part of the Financial Services and Markets Acts 2000, and will expand upon its existing money laundering and financial promotion rules.
The FCA is focused on protecting market integrity
The FCA’s cryptoasset regulatory framework is centred on five core policy statements: admissions and disclosures of market abuse, stablecoin issuance, regulated cryptoasset activities, prudential framework and application of the FCA handbook.
Under admissions and disclosures, regulated entities are expected to uphold the proper due diligence and record keeping of capital requirements and consumer assets. Firms will be expected to perform daily record keeping to ensure this, as well as filling out point-in-time disclosure documents.
This is in order to protect market integrity from abuse. Regulated firms are expected to conduct on-chain monitoring of crypto and digital asset trading and staking. Operators should perform insider lists and conduct legitimate market practices to mitigate fraud and scams.
These practices also translate to crypto lending and borrowing, where appropriate testing and prior consent is a constant expectation for the FCA.
Operators must ensure that collateral needs to be held in the advent of consumers being either unable or unwilling to pay back a crypto loan. There should also be no use of proprietary tokens for paying out loans and there must be clarification of what is being used of the collateral and automatic top up limits.
Olenka Apperley, Crypto Policy Manager of Payments & Digital Assets, at the FCA said during the webinar: “Market abuse is not just an FCA objective, but it falls upon the markets themselves to maintain integrity.”
Why new UK stablecoin rules matter
One of the most recent additions to the framework was the FCA and Bank of England’s new rules around systemic stablecoins and their issuance.
Under the FCA rules, an issuer must back a UK stablecoin to the full value of coins in issue, holding at least 10% in core assets such as on-demand deposits and short-term government debt, with the rest in a wider permitted set.
Redemptions must complete by the end of the next business day, and backing assets must sit in segregated accounts under a statutory trust, reconciled daily. The minimum own funds requirement is the higher of £350,000, three months of operating costs, or a K-factor charge of 1% of coins in issuance.
Within the FCA’s rules, stablecoin issuers must reference a single fiat currency and for it to be fully backed at all times. Stablecoins should have backing assets held in statutory trusts for holders, as well as a mix of core backing assets for liquidity requirements.
Redemptions are expected to be settled with T+1 after the recipient has received the stablecoin from the issuer.
Nick Smith, Stablecoin Policy Manager of Payments and Digital Assets, said: “We want stablecoins to be treated as money-like instruments.
“Tokens must be backed at all times and separately from the customer’s own assets. We want UK stablecoins to ensure they are fully backed, redeemable and fully governed.”
