Overview of our cryptoassets regime policy statements

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

• PS26/13: Applying the FCA Handbook[23]
  • FG26/5: Guidance on the Application of the Consumer Duty to Cryptoasset Firms[24] 
  • FG26/6: Cryptoasset Operational Resilience[25]
  • FG26/7: Approach to international cryptoasset firms[26]
• PS26/12: Prudential Requirements[20]
  • GC26/4: Consultation on COREPRU[21]
  • GC26/5: Consultation on CRYPTOPRU[22]
• Aggregate Cost Benefit Analysis[27]

Stablecoin Issuers and Custodians should read: 

• the Stablecoin Issuance policy statement[18] which covers rules relating to backing assets and safeguarding, redemption requirements, disclosures to holders
• the joint publication with the Bank of England[27] relating to dual regulation of systemic stablecoins; and
• Section 4 of the joint Guidance on the operation of the Digital Securities Sandbox[28], 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

Firms providing Cryptoasset Services (trading, dealing, custody, staking or lending and borrowing) should read:  

• the Regulated Cryptoasset Activities policy statement[19] which covers activity specific rules for firms who are trading platforms or intermediaries, safeguarding (custody) of client cryptoassets, lending and borrowing, and staking providers

Firms Issuing, admitting or trading cryptoassets should read:  

• the Admissions and disclosures (A&D) and market abuse (MARC) policy statement[17], which covers disclosure requirements for offers and admissions, due diligence and admission standards, and market abuse controls

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

We have maintained the core framework as consulted on, while improving proportionality and clarity. Key changes include: 

• Simplifying the backing asset composition requirement by no longer having to estimate redemption forecasts. 
• Confirming statutory trust arrangements for backing assets and the removal of unallocated backing fund accounts. 
• Adjusting redemption timelines to ensure they are operationally effective. 
• Allowing limited intragroup custody subject to safeguards. 
• Permitting up to a 5% excess to be held in the backing asset pool. 
• Additional clarity around the application of redemption requirements to the secondary market. 
• Ensuring holders have access to historical disclosures and strengthening obligations to make sure prospective holders are aware of their withdrawal rights.  

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

• UK QCATP operators & intermediaries (including dealers and arrangers): We have refined our policy to remove principal dealers from pre‑trade transparency requirements. We have updated guidance to address issues for dual‑regulated firms and provide clearer expectations on best execution, including the use of multiple execution venues for price checks. We have confirmed that best execution requires effective overarching arrangements rather than transaction‑by‑transaction checks, supported by periodic monitoring and post‑trade analysis, while generally maintaining a principles‑based approach rather than introducing more prescriptive requirements. 
• Lending and Borrowing: We are maintaining core retail protections, including enhanced disclosures, consent, appropriateness testing, record‑keeping, and safeguards such as over‑collateralisation and negative balance protection. We have made targeted amendments to collateral arrangements, including permitting the staking of retail client collateral (subject to CASS 17) and clarifying that limits on automatic collateral top‑ups apply only to firms, without restricting clients’ ability to manually top up positions. 
• Safeguarding: We are proceeding with the proposed application of CASS 17 to client cryptoassets, with strong stakeholder support for enhanced protections around ownership rights, record‑keeping, reconciliation, and private key management. We have introduced targeted exceptions to trust requirements, clarified the scope of control-based application, increased the percentage limit permitted to facilitate the settlement float model to 2%, and adopted a technology‑agnostic approach to private key management, while planning further engagement on tokenised asset custody and potential future CASS amendments, as well as future consultation on resolution of crypto custodians. We are not proceeding with applying CASS 17 to relevant specified investment cryptoasset (RSIC) custody at this stage. At the outset of the cryptoasset regime, firms seeking to become authorised to provide RSIC custody will need to do so as a cryptoasset custodian but will need to apply the CASS 6 requirements when safeguarding RSICs for the time being. We are also proceeding with our proposal to apply CASS 7 to client money arising, or in connection with, the safeguarding of client cryptoassets, with targeted adjustments to ensure these provisions apply appropriately and avoid duplication or unintended outcomes. Firms carrying on the activity of issuing qualifying stablecoins will not be subject to CASS 7. 
• Staking: We are maintaining the overarching approach to strengthening retail consumer understanding, including requirements for disclosures, contractual terms and client consent, alongside record‑keeping for all clients. We have amended the rules 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. We have clarified how record keeping requirements apply to liquid staking models. Perimeter issues will be addressed through separate guidance. 
• Decentralised Finance (DeFi): Our rules and guidance will apply to DeFi firms where there is an identifiable controlling entity, consistent with the Treasury defined perimeter. In response to supportive feedback and requests for clarity, we will take a case‑by‑case approach to assessing scope and will consult on tailored DeFi guidance, including objective indicators of decentralisation and expectations for managing operational resilience and financial crime risks, while avoiding overly prescriptive rules that could hinder innovation. 

We have maintained the core framework consulted on in CP25/41, while making targeted changes to improve proportionality, clarity and operability.  

• A&D: We have clarified requirements relating to due diligence, admission criteria and the trigger for supplementary disclosure documents, specifying a digital token identifier standard (applicable across A&D and MARC), strengthening withdrawal rights notifications, and removing an exception that allowed qualifying cryptoassets to be admitted to trading without a QCDD if they were fungible with those already admitted to trading on the same platform.  
• MARC: We have retained the industry-led framework and the threshold for large UK QCATP operator obligations, while narrowing the on-chain monitoring requirement for large UK QCATPs, clarifying key requirements relating to inside information disclosure and intermediary notifications to UK QCATPs, refining legitimate market practices and adding examples of inside information. 

• Stablecoin issuance capital requirement: We have carefully considered the feedback on the calibration of the K-factor for stablecoin issuance, K-SII. We have decided to change the coefficient of K-SII from 2% to 1%. This change makes the prudential framework more proportionate for larger issuers while maintaining the robustness of the overall regime. 
• Market risk and counterparty default risk capital requirements: We have carefully considered the feedback received about our proposed two-tier classification of qualifying cryptoassets for capital purposes (Category A / B). In response, we have simplified the market risk framework. In the revised 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 (net cryptoasset position) and a 40% volatility adjustment for K‑CCD (counterparty credit default). Cryptoassets that do not meet these conditions are deducted from regulatory capital and subject to 100% volatility adjustment for K-CCD. This approach steps away from the more complex categorisation previously proposed while retaining the underlying distinction in risk, providing a clearer and more proportionate framework without weakening the prudential protections it is designed to deliver. 
• Public disclosure of prudential information: Having considered feedback, we have removed the proposed requirement to publicly disclose the own funds threshold requirement (OFTR) and the liquid asset threshold requirement (LATR). We have also introduced a proportionality framework based on own funds requirements (OFR) for the public disclosure of prudential information. Where a firm’s permanent minimum requirement (PMR) is the binding component of its OFR, then the firm is not required to make the public disclosure. However, the public disclosure is required to be made when the firm’s fixed overheads requirement (FOR) or K-factor requirement (KFR) is the binding component of its OFR.

We have considered feedback and refined our assumptions, inputs and methodology. These changes are intended to improve the clarity, consistency and robustness of our analysis, including by updating certain cost assumptions, incorporating additional stakeholder evidence where relevant, and ensuring greater alignment across the policy statements. These refinements do not materially change the overall conclusions of the CBA. We still anticipate our rules will deliver net positive benefits to market participants. 

We do not consider that the changes to the rules and guidance, as consulted on, other than those relating to the prudential instrument, are significant for the purposes of s138I(5) FSMA 2000. We are publishing a full cost benefit analysis to meet the requirement in s138I(5)(a) FSMA 2000. Additionally, the amendments to the rules do not have an impact on the compatibility statement(s) set out in the Consultation Papers. For clarity, we have also combined our CBAs produced across our previous consultation papers into a single analysis assessing the impact of our rules. 

We have, and will continue to, support firms who are intending on applying for their Part 4A FSMA authorisation.  

There are also a number of additional components of the cryptoasset regime which we have not addressed through these policy statements, and which will be progressed through policy development and further consultation. These components include work across areas such as decentralised finance (DeFi), distributed ledger technology (DLT), cryptoasset derivatives, stablecoin-related policy development, audit requirements and saving and transitional provisions.  

Savings provisions 

The savings provisions, set out in the Cryptoassets Regulations, allow certain firms already operating in UK cryptoasset markets to continue specified activities for a limited period while they seek authorisation, subject to defined conditions and time limits. These include transitional and deferral arrangements designed to support an orderly implementation of the regime while maintaining appropriate consumer protections. 

Resolution 

We will consult later this year on our proposed approach to managing cryptoasset firm failure. This will include distribution rules that would apply where a stablecoin issuer or a cryptoasset custodian has failed. As part of this, we may consider the rules on suspension of redemption of stablecoins to make sure they achieve their aims, both in firm failure and the run-up to it, and this may result in some changes.  

Financial Crime 

We also plan to provide further clarity on financial crime requirements, including the application of AML and KYC obligations, through updates to the Financial Crime Guide. These updates aim to ensure a consistent and comprehensive framework, including clear guidance and practical examples of good and poor practice. We will also consult on these changes later this year. 

Regulatory Reporting 

We will continue to develop our approach in areas such as regulatory reporting. Before the regime commences, we will work with firms to develop supplementary questions that will apply from the outset, alongside the baseline and existing returns set out in the policy statements. That work will focus on testing how firms hold the relevant data, refining the wording and definitions of questions, and ensuring the reporting is clear, proportionate and operationally deliverable. This reflects our decision to keep the baseline returns lighter at commencement, so that firms provide the core information we need for supervision without unnecessary burden, while more targeted or detailed metrics are developed with firms where supervisory need justifies them.  

We will also make available the reporting materials and a version of the reporting interface ahead of commencement, so that firms have early sight of the requirements and time to prepare their systems, processes and controls. 

Review period 

We will keep the operation of the rules under review and make further adjustments where necessary. The regime will need to operate for a period before it can be fully assessed, and any proposed changes will be consulted on in the usual way. 

We also intend to undertake a formal review of the regime approximately 2 years after it comes into force to assess whether it is delivering its intended outcomes. We will also assess whether any adjustments are needed to make sure it remains proportionate and effective as the market develops. Should we need to make changes we will gather evidence from firms, consumers and wider stakeholders and will consult on any proposed changes in the usual way. The key indicators we will use to assess whether our rules are achieving their intended outcomes will remain as they were set out in our CPs. 

Our approach to supervision[29] seeks to be proportionate, prioritising key areas of focus and firms that pose a higher risk to our objectives. We also intend to make our areas of focus predictable so that firms have an opportunity to make positive change without the need for regulatory action.  

Our enforcement approach[30] aims to ensure there are real and meaningful consequences for firms and individuals who do not follow our rules and who cause significant harm to consumers and markets. We consider the deterrent impact of any enforcement action and focus our efforts on achieving impactful deterrence.

We are committed to working with firms throughout the authorisation process and beyond. The steps below set out what firms need to do and how we can help. 

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.  

In April 2026, the Government published a draft SI proposing to exclude activities involving UK-issued qualifying stablecoins from arranging and dealing, with the intention of bringing these activities under a modernised future payments regime. If implemented, this may affect the regulatory treatment of certain cryptoasset activities and the extent to which they fall within the FCA’s perimeter. Persons carrying out stablecoin-related activities should consider the legislation as in force at the relevant time. 

To be authorised, a firm must show that it satisfies, and will continue to satisfy, the minimum standards in FSMA (the Threshold Conditions). 

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.  

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 under the saving and transitional provisions 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. 

Firms may wish to attend our information sessions and consider using the Pre-Application Support Service (PASS)[31] to help prepare a high-quality application. Firms should also consider seeking independent legal and compliance advice when preparing an application. 

Once authorised, firms must continue to satisfy the Threshold Conditions and comply with all applicable regulatory requirements. This includes complying with applicable rules and reporting requirements that apply to them, maintaining appropriate systems and controls, and engaging openly and cooperatively with the FCA in the course of supervision.

The cryptoasset regime supports Our Strategy 2025–2030[32] priorities by: 

• Supporting sustained economic growth by creating predictable regulation aligned with international standards, enabling well-run firms to innovate, invest, and compete from the UK.  
• Helping consumers navigate their financial lives by ensuring they are appropriately informed, treated fairly, and able to access products that offer fair value, while being protected from poor conduct and harmful practices. 
• Fighting financial crime by strengthening firms’ systems and controls to prevent, detect and disrupt fraud, money laundering, terrorist and proliferation financing, and market abuse. 
• Supporting us in being a smarter regulator by applying the ‘same risk, same regulatory outcome’ principle where possible and, relying on existing frameworks such as the Consumer Duty where appropriate, and ensuring regulation is targeted, effective and proportionate. 

We want to create a cryptoasset market that supports our strategic objectives in the following ways:

We will evaluate success using a range of market, firm and consumer- focused indicators aligned with the FCA strategy and the statutory objectives they support. We will also monitor and evaluate the assumptions underpinning our cost benefit analyses over time. This includes through a post‑implementation review of the regime.

Strategic outcomes

We have engaged extensively with stakeholders and received feedback across the Consultation Papers:

We have conducted an Equality Impact Assessment (EIA) as part of the Policy Statement process. Overall, based on our assessment and the available evidence, we do not consider that the rules materially adversely affect any groups with protected characteristics under the Equality Act 2010 (noting that, in Northern Ireland, equivalent antidiscrimination legislation applies).

We have considered whether our rules might present challenges or disadvantage to any particular kind of firm, in particular to firms which follow the principles of Sharia-compliant finance and concluded that no direct or indirect disadvantage is caused. In this context, we have carefully considered the risk and liquidity profile of the assets we allow in the backing pool for stablecoins.

We consider that the risk and liquidity profile of these assets is appropriate, and are satisfied that it is possible to use or develop products which meet the principles of Sharia-compliant finance within those asset classes.

Analysis of data from our Financial Lives Survey (2024) and our cryptoassets consumer research indicates that current cryptoasset ownership is concentrated among younger consumers, men, those with higher-than-average incomes and some ethnic minority groups. While these groups are currently overrepresented, we expect all consumers who interact with cryptoasset firms to benefit from the introduction of a regulatory regime.

We have also considered the potential impact on digitally excluded consumers. While cryptoasset services are typically accessed online, we expect firms to consider accessibility and the needs of vulnerable consumers in line with the Consumer Duty. 

Future regulation of cryptoasset firms is intended to reduce information asymmetries, lower the prevalence of market abuse and provide an appropriate degree of consumer protection. Our research suggests that increased regulation could increase consumer confidence and willingness to invest, particularly where it provides clearer protection. Over time this may contribute to a wider range of consumers engaging with cryptoassets.

A broader consumer base may increase the potential for harm, including to more vulnerable consumers. This underlines the importance of proportionate protections.

We do not consider that the proposals will adversely affect any groups with protected characteristics, nor do we believe they will negatively impact financial inclusion. As the regime develops, we will continue to consider whether our work could affect the composition of consumers in this market or have implications for equality and diversity.

Some cryptoasset activities (e.g. including certain transactions involving Bitcoins) involve a significant use of energy. In developing the regime, we have considered the environmental, social and governance implications of our proposals and our duty under ss.1B(5) and 3B(1)(c) of FSMA 2000 to have regard to contributing towards the Secretary of State achieving compliance with the net-zero emissions target under s.1 of the Climate Change Act 2008 and environmental targets under s.5 of the Environment Act 2021.

Overall, and given the FCA perimeter set out in the Cryptoassets Regulations, we do not consider that the rules are relevant to contributing to those targets. We will continue to monitor how industry evolves and consider how our rules interact with those targets.