There have been a substantial number of developments since my December 2025 blog: Pragmatic Policymaking. In summary, HM Government, the Financial Conduct Authority (FCA) and Bank of England are pressing on with finalising their rules prior to 25 October 2027’s ‘go-live’ date for the UK’s regulatory framework for crypto. UK Finance has published several papers since the start of the year with its members on how the authorities should approach this final rule-setting stage. This blog summarises them and highlights our key advocacy priorities.

Last bits of operational and prudential rules: CP25/40, CP25/41 and CP25/42

The FCA published three very chunky consultations (648 pages in total) in December 2025 which progressed the design of some of the more ‘operational’ type requirements, including around how cryptoasset trading platforms (CATPs) and intermediaries should do things like handle best execution and order handling processes prior to assets being admitted to trading. The proposals also covered the final provisions that will be included in the crypto prudential sourcebooks ‘COREPRU/CRYPTOPRU’, including the economic and risk factors around the regulatory capitalisation metrics for specific types of tokens.

Our members raised a number of points on the importance of holding up the ‘same risk, same regulation’ principle [reference 2] that is crucial to the framework’s design:

• Conflict of interest: Some members suggested that a firm’s separation between its proprietary trading and client activities for retail clients should be more robust, in order to mitigate possible risks around conflict-of-interest issues.
• Delineation of investor types: Something we have consistently called for is the need for the FCA to give more flexibility for high-net-worth individuals and professional investors compared to retail investors, as exists in traditional finance.  
• Concerns over approach to market abuse reporting: There is some concern across the industry that CATPs will take on too much responsibility over monitoring and reporting market abuse and manipulation in the market.

On the prudential side, our key ask was to request clarity on how non-systemic stablecoins issued by Prudential Regulation Authority (PRA) Designated Investment Firms (i.e., a dual-regulated, non-deposit taking institutions) would be prudentially regulated. It is also crucial that the position risk adjustments for certain crypto exposures should be consistent with the ratios in the Basel crypto standard [reference 3]. This will ensure all comparable regulated tokens receive the same capitalisation measures, resulting in a more secure and resilient market.

Last bits of conduct (but very important) rules: CP26/4

The FCA published its last main consultation as part of the Crypto Roadmap, progressing the conduct related rules, including how crypto firms will comply with existing sourcebooks such as high-level principles for business, and the conduct ‘nuts and bolts’ of assessing clients’ competencies for communicating with them (amongst other things). UK Finance picked up a number of issues around how the FCA is moving away from its ‘same risk, same regulation’ principle – or rather, not treating fungible assets the same, regardless of where the underlying value derives. Additionally, the market feels strongly that overseas authorised firms should be able to utilise existing UK based branches to undertake digital asset activities.

Progress on the Bank’s proposed systemic stablecoins regime and UK Finance response to the House of Lord's stablecoins Inquiry Call for Evidence

The Bank published its follow-up consultation on its systemic regime, outlining where it had got to in the key requirements proposed for issuers of systemic stablecoins. While this blog will not run through our members’ views on all these requirements, everyone across the sector supports the Bank’s aim to build a regime that supports the development of a resilient future systemic stablecoin payment market, while mitigating the economic risks. We’re expecting the Bank to publish its next steps over the summer following responses to this consultation, this will hopefully include detailed guidance around how it intends intermediaries to operationalise holding limits on Sterling systemic stablecoins.

UK Finance also submitted its response to the House of Lords Financial Services Regulatory Services Regulation Committee’s (FSRC) Inquiry into Stablecoins, following Jana Mackintosh’s (Managing Director, Payments and Innovation, UK Finance) oral evidence session. This paper largely says the same things as our Bank response, mainly showing broad support for where the FCA and Bank are going with their respective regimes.

What’s next?

UK Finance is currently reviewing the FCA’s latest consultation (CP26/13) which defines the precise parameters of what is deemed to be ‘in’ and ‘out’ of its Handbook. One thing that is critical is that the FCA must give sufficient guidance to existing traditional finance firms looking to conduct regulated crypto activity alongside their other products in traditional finance. This ask extends to the PRA to support industry understanding of how the rules for crypto products will interact with their existing regulatory obligations, particularly in respect of their regulated capital stacks and exposures data reporting. This also connects to how the PRA intends to apply the Basel Committee on Banking Supervision’s (BCBS) standard for how globally systemic banks should effectively capitalise against crypto products (or those that they are exposed to). We expect the PRA to publish its updated thinking over the summer.

So, what does all this mean for the ecosystem? The new regulatory framework has set the groundwork for defined roles and responsibilities of intermediaries. UK Finance believes that many of the firms that have played an important role in intermediation to date will continue to do so and thereby help to ensure that the synergies with traditional markets can be realised.

References

1. Readers are encouraged to review Denise Garcia Ocampo, Peter Goodrich and Gian-Piero Lovicu’s recent ‘Cryptoasset service providers as financial intermediaries: risks and policy approaches’ paper from the Bank of International Settlements (BIS), who examine this wider policy question in closer detail.
2. Discussed in more detail in my previous blog.
3. Update [180526]: The PRA published its latest Dear CEO digital money letters on 18 May (see here and here), signaling that PRA regulated firms should continue to apply the current (as of 2022) prudential framework to cryptoasset exposures - including governance, risk management, capital and liquidity requirements, ICAAP and Pillar 1. The exposures letter is intended to be temporary, as the PRA will follow the implementation of the wider Basel Committee on Banking Supervision’s (BCBS) crypto standard which is currently being reviewed.